1040 Preparation and Planning 5: Gross Income: Capital Gains and Losses (2020)

Author: Barbara Weltman, Sidney Kess

CPE Credit:  3 hours for CPAs
3 hours Federal Tax Related for EAs and OTRPs
3 hours Federal Tax Law for CTEC

This on-demand course discusses gains and losses. It defines basic terms, such as amount realized, basis, realized gain, and realized loss. It explains the basic requirements for nonrecognition of gain on involuntary conversions, and computation of the basis of property. The course looks at the distinction between capital and ordinary assets, which is important because capital gains and losses are reported differently from ordinary gains and losses, and the deduction of capital losses is sharply limited. It also covers Form 8949 and Schedule D of Form 1040.

The exclusion of gain from sale of a principal residence, and how the business use of a home affects that will be covered and expenses that can increase or decrease the basis in a principal residence will be explained. Additionally, the course covers how to handle like-kind exchanges (including exchanges of insurance policies) property settlements on marital dissolutions, involuntary conversions, and special exchange rules.

Publication Date: November 2019

Designed For
Tax practitioners

Topics Covered

  • Form 1040
  • Gains and losses
  • Involuntary conversions
  • Capital and ordinary assets
  • Capital gains and losses
  • Form 8949 and Schedule D
  • Wash sale rule and installment sale rule
  • Principal residence
  • Exclusions, gains and sales
  • Home office expenses
  • Like-kind exchanges
  • Property settlements
  • Involuntary conversion
  • Exchange rules

Learning Objectives

  • Describe what a capital asset is
  • Describe tax basis and holding period
  • Figure gain or loss
  • Apply the capital loss limitation
  • Describe the wash sale rule
  • Determine reporting under the installment sale rule
  • Complete Form 8949 and Schedule D of Form 1040
  • Figure the exclusion of gain from the sale of a principal residence
  • List improvements and other expenses that increase or decrease basis in a principal residence
  • Determine whether a transaction qualifies as a like-kind exchange
  • Explain the rules for involuntary conversions
  • Discuss special exchange rules for certain types of property


Instructional Method

NASBA Field of Study
Taxes (3 hours)

Program Prerequisites

Advance Preparation

Registration Options
Regular Fee $66

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