How does Form 1099-DA relate to Form 8949?

 Form 1099-DA provides taxpayers with the necessary details to complete Form 8949 (Sales and Other Dispositions of Capital Assets) when reporting capital gains and losses. The information includes the asset name, number of units, acquisition and disposal dates, and proceeds from the transaction. It also consists of a transaction code that helps recipients report the sale correctly on Form 8949 and/or Schedule D (Form 1040):

• Code G – Short-term transaction with cost basis reported to the IRS.

• Code H – Short-term transaction with cost basis not reported to the IRS.

• Code J – Long-term transaction with cost basis reported to the IRS.

• Code K – Long-term transaction with cost basis not reported to the IRS.

• Code Y – Transaction with an unknown holding period (cannot determine whether to use H or K).

In short, Form 1099-DA serves as the primary source of information that taxpayers rely on to accurately complete Form 8949 and calculate their capital gains or losses.