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On schedule D, line 22, it says to Complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, Line 44.

If I have reached line 22 on Schedule D, because Line 16 was either a gain or a loss, is Form 1040, Line 13 supposed to be filled from Line 16, or from the result of the Qualified Dividends and Capital Gain Tax Worksheet?

Part of my confusion is because the top of the worksheet says Before completing this worksheet, complete Form 1040 through line 43. If Form 1040, Line 13 requires the Qualified Dividends and Capital Gain Tax Worksheet, then we seem to have a circular dependency.

Raj
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merlin2011
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2 Answers2

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Yes, 1040 L13 is always populated based on the value on Schedule D L16. If L16 is a gain or zero then you fill in 1040 L13 immediately while entering L16. If it's a loss then you fill in 1040 L13 when completing Schedule D L21 (and the value from L16 may be altered in the process).

The QD&CG Tax Worksheet does not affect 1040 L13. It only affects 1040 L44.

dg99
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The worksheet is only used for figuring the amount of tax (for line 44 on form 1040), not the value for 1040 line 13.

Form 1040, line 13 comes from either line 16 or line 21 of Schedule D, depending on whether there is a gain or loss on line 16 of Schedule D.

Line 21 of Schedule D comes into play because there is a limit on capital losses for a given tax year. Any remaining loss gets carried over to the next year to lines 6 or 14 (of Schedule D), depending on whether it is a short- or long-term loss carryover.

jonsca
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