Introduction This chapter discusses how to report capital gains and losses from sales, exchanges, and other dispositions of investment property on Schedule D of Form 1040. The discussion includes: How to report short-term gains and losses, How to report long-term gains and losses, How to figure capital loss carryovers, How to figure your tax using the lower tax rates on a net capital gain, and An illustrated example of how to complete Schedule D. If you sell or otherwise dispose of property used in a trade or business or for the production of income, see Publication 544, Sales and Other Dispositions of Assets, before completing Schedule D.