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Pass-Through Entities
If you held an interest in a pass-through
entity (a partnership, S corporation,
common trust fund, or mutual fund or
other regulated investment company)
that sold QSB stock, to qualify for the
exclusion you must have held the inter-
est on the date the pass-through entity
acquired the QSB stock and at all times
thereafter until the stock was sold.
How To Report
Report the sale or exchange of the QSB
stock on Form 8949, Part II, with the ap-
propriate box checked, as you would if
you weren't taking the exclusion. Then
enter “Q” in column (f) and enter the
amount of the excluded gain as a nega-
tive number in column (g). Put it in pa-
rentheses to show it is negative. See the
instructions for Form 8949, columns (f),
(g), and (h). Complete all remaining col-
umns. If you are completing line 18 of
Schedule D, enter as a positive number
the amount of your allowable exclusion
on line 2 of the 28% Rate Gain Work-
sheet; if you excluded 60% of the gain,
enter
2
/3 of the exclusion; if you exclu-
ded 75% of the gain, enter
1
/3 of the ex-
clusion; if you excluded 100% of the
gain, don't enter an amount.
Gain from Form 1099-DIV. If you re-
ceived a Form 1099-DIV with a gain in
box 2c, part or all of that gain (which is
also included in box 2a) may be eligible
for the section 1202 exclusion. Report
the total gain (box 2a) on Schedule D,
line 13. In column (a) of Form 8949,
Part II, enter the name of the corporation
whose stock was sold. In column (f), en-
ter “Q,” and in column (g), enter the
amount of the excluded gain as a nega-
tive number. See the instructions for
Form 8949, columns (f), (g), and (h). If
you are completing line 18 of Sched-
ule D, enter as a positive number the
amount of your allowable exclusion on
line 2 of the 28% Rate Gain Worksheet;
if you excluded 60% of the gain, enter
2
/3 of the exclusion; if you excluded
75% of the gain, enter
1
/3 of the exclu-
sion; if you excluded 100% of the gain,
don't enter an amount.
Gain from Form 2439. If you received
a Form 2439 with a gain in box 1c, part
or all of that gain (which is also included
in box 1a) may be eligible for the sec-
tion 1202 exclusion. Report the total
gain (box 1a) on Schedule D, line 11. In
column (a) of Form 8949, Part II, enter
the name of the corporation whose stock
was sold. In column (f), enter “Q,” and
in column (g), enter the amount of the
excluded gain as a negative number. See
the instructions for Form 8949, columns
(f), (g), and (h). If you are completing
line 18 of Schedule D, enter as a posi-
tive number the amount of your allowa-
ble exclusion on line 2 of the 28% Rate
Gain Worksheet; if you excluded 60% of
the gain, enter
2
/3 of the exclusion; if
you excluded 75% of the gain, enter
1
/3
of the exclusion; if you excluded 100%
of the gain, don't enter an amount.
Gain from an installment sale of QSB
stock. If all payments aren't received in
the year of sale, a sale of QSB stock that
isn't traded on an established securities
market is generally treated as an install-
ment sale and is reported on Form 6252.
Report the long-term gain from Form
6252 on Schedule D, line 11. Figure the
allowable section 1202 exclusion for the
year by multiplying the total amount of
the exclusion by a fraction, the numera-
tor of which is the amount of eligible
gain to be recognized for the tax year
and the denominator of which is the to-
tal amount of eligible gain. In column
(a) of Form 8949, Part II, enter the name
of the corporation whose stock was sold.
In column (f), enter “Q,” and in column
(g), enter the amount of the allowable
exclusion for the year as a negative
number. See the instructions for Form
8949, columns (f), (g), and (h). If you
are completing line 18 of Schedule D,
enter as a positive number the amount of
your allowable exclusion for the year on
line 2 of the 28% Rate Gain Worksheet;
if you excluded 60% of the gain, enter
2
/3 of the allowable exclusion for the
year; if you excluded 75% of the gain,
enter
1
/3 of the allowable exclusion for
the year; if you excluded 100% of the
gain, don't enter an amount.
Alternative minimum tax. If you qual-
ify for the 50%, 60%, or 75% exclusion,
enter 7% of your allowable exclusion for
the year on line 13 of Form 6251. If you
qualify for the 100% exclusion, leave
line 13 of Form 6251 blank.
Rollover of Gain From QSB
Stock
If you sold QSB stock (defined earlier)
that you held for more than 6 months,
you can elect to postpone gain if you
buy other QSB stock during the 60-day
period that began on the date of the sale.
A pass-through entity can also make the
election to postpone gain. The benefit of
the postponed gain applies to your share
of the entity's postponed gain if you held
an interest in the entity for the entire pe-
riod the entity held the QSB stock. If a
pass-through entity sold QSB stock held
for more than 6 months and you held an
interest in the entity for the entire period
the entity held the stock, you can also
elect to postpone gain if you, rather than
the pass-through entity, buy the replace-
ment QSB stock within the 60-day peri-
od. If you were a partner in a partnership
that sold or bought QSB stock, see
box 11 of the Schedule K-1 (Form 1065)
sent to you by the partnership; also, see
Regulations section 1.1045-1.
You must recognize gain to the extent
the sale proceeds are more than the cost
of the replacement stock. Reduce the ba-
sis of the replacement stock by any post-
poned gain.
You must make the election no later
than the due date (including extensions)
for filing your tax return for the tax year
in which the QSB stock was sold. If
your original return was filed on time,
you can make the election on an amen-
ded return filed no later than 6 months
after the due date of your return (exclud-
ing extensions). Enter “Filed pursuant to
section 301.9100-2” at the top of the
amended return.
To make the election, report the sale
in Part I or Part II (depending on how
long you, or the pass-through entity, if
applicable, owned the stock) of Form
8949 as you would if you weren't mak-
ing the election. Then enter “R” in col-
umn (f). Enter the amount of the post-
poned gain as a negative number in col-
umn (g). Put it in parentheses to show it
is negative. See the instructions for
Form 8949, columns (f), (g), and (h).
Complete all remaining columns.
Exclusion of Gain From DC
Zone Assets
If you sold or exchanged a District of
Columbia Enterprise Zone (DC Zone)
asset that you acquired after 1997 and
before 2012 and held for more than 5
years, you may be able to exclude the
amount of qualified capital gain that you
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