Form 1041 Schedule D Tax Worksheet, Lines 1 to 44 (2025)

Updated November 6, 2026. Quick answer: The Schedule D Tax Worksheet in the 2025 Instructions for Schedule D (Form 1041) figures an estate’s or trust’s tax when it has capital gains or qualified dividends, using layers at 0% (line 19), 15% (line 27), 20% (line 31), 25% (line 37) and 28% (line 40). It has 44 numbered lines (line 17 is split into 17a, 17b and 17c, and line 28 is reserved), and line 44 goes on Form 1041, Schedule G, Part I, line 1a.

When an estate or trust completes it

The worksheet is marked “Keep for Your Records”. The IRS says “Complete this worksheet only if:” and lists three situations:

“On Schedule D, line 18b, column (2), or line 18c, column (2), is more than zero, or”
“Both line 2b(1) of Form 1041 and line 4g of Form 4952, Investment Interest Expense Deduction, are more than zero, or”
“There are amounts on lines 4e and 4g of Form 4952.”

The worksheet also has an exception: “Don’t use this worksheet to figure the estate’s or trust’s tax if line 18a, column (2), or line 19, column (2), of Schedule D or Form 1041, line 23, is zero or less; instead, see the Instructions for Form 1041, Schedule G, Part I, line 1a.”

The instructions name this worksheet as the alternative to Part V of Schedule D: “If you completed the Schedule D Tax Worksheet next instead of Part V of Schedule D, be sure to enter the amount from line 44 of the worksheet on line 1a of Form 1041, Schedule G, Part I.”

Lines 1 to 19: the starting amounts and the 0% layer

Lines 1 to 6 start from taxable income and qualified dividends and net out the Form 4952 amounts. Lines 7 to 13 take the Schedule D gain, add it to the qualified dividends, as netted on line 6, on line 10, and subtract line 12, the smaller of line 9 and the Schedule D line 18b and 18c total. Lines 14 to 19 then work out the layer taxed at 0%.

Line	As printed in the IRS worksheet
1	“Enter the estate’s or trust’s taxable income from Form 1041, line 23”
2	“Enter qualified dividends, if any, from Form 1041, line 2b(2)”
3	“Enter the amount from Form 4952, line 4g”
4	“Enter the amount from Form 4952, line 4e”
5	“Subtract line 4 from line 3. If zero or less, enter -0-”
6	“Subtract line 5 from line 2. If zero or less, enter -0-”
7	“Enter the smaller of line 18a, column (2), or line 19, column (2), from Schedule D”
8	“Enter the smaller of line 3 or line 4”
9	“Subtract line 8 from line 7. If zero or less, enter -0-”
10	“Add lines 6 and 9”
11	“Add lines 18b, column (2), and 18c, column (2), from Schedule D”
12	“Enter the smaller of line 9 or line 11”
13	“Subtract line 12 from line 10”
14	“Subtract line 13 from line 1. If zero or less, enter -0-”
15	“Enter the smaller of line 1 or $3,250”
16	“Enter the smaller of line 14 or line 15”
17a	“Subtract line 10 from line 1. If zero or less, enter -0-”
17b	“Enter the smaller of line 1 or $11,450”
17c	“Enter the smaller of line 14 or line 17b”
18	“Enter the larger of line 17a or line 17c”
19	“Subtract line 16 from line 15. This amount is taxed at 0%”

Line 4 carries an asterisk. The IRS footnote says “If applicable, enter instead the smaller amount entered on the dotted line next to line 4e of Form 4952.”

Lines 20 to 29: the 15% layer

Before line 20 the worksheet has a skip rule: “If lines 1 and 15 are the same, skip lines 20 through 40 and go to line 41. Otherwise, go to line 20.” Line 28 is printed as “Reserved”, so there is nothing to enter on it. Before line 30 there is a second skip rule: “If lines 1 and 29 are the same, skip lines 30 through 40 and go to line 41. Otherwise, go to line 30.”

Line	As printed in the IRS worksheet
20	“Enter the smaller of line 1 or line 13”
21	“Enter the amount from line 19 (if line 19 is blank, enter -0-)”
22	“Subtract line 21 from line 20. If zero or less, enter -0-”
23	“Enter the smaller of line 1 or $15,900”
24	“Add lines 18 and 19”
25	“Subtract line 24 from line 23. If zero or less, enter -0-”
26	“Enter the smaller of line 22 or line 25”
27	“Multiply line 26 by 15% (0.15)”
28	“Reserved”
29	“Add lines 19 and 26”

Lines 30 to 40: the 20%, 25% and 28% layers

Line 31 is the 20% layer, line 37 the 25% layer and line 40 the 28% layer. A third skip rule sits above line 38: “If Schedule D, line 18c, column (2), is zero or blank, skip lines 38 through 40 and go to line 41. Otherwise, go to line 38.”

Line	As printed in the IRS worksheet
30	“Subtract line 29 from line 20. If zero or less, enter -0-”
31	“Multiply line 30 by 20% (0.20)”
32	“Enter the smaller of line 9 (above) or line 18b, column (2) (from Schedule D)”
33	“Add lines 10 and 18”
34	“Enter the amount from line 1 above”
35	“Subtract line 34 from line 33. If zero or less, enter -0-”
36	“Subtract line 35 from line 32. If zero or less, enter -0-”
37	“Multiply line 36 by 25% (0.25)”
38	“Add lines 18, 19, 26, 30, and 36”
39	“Subtract line 38 from line 1”
40	“Multiply line 39 by 28% (0.28)”

Lines 41 to 44: the finish

The ordinary-rate tax comes from outside the worksheet: lines 41 and 43 send you to the Tax Rate Schedule in the Instructions for Form 1041, which this page does not reproduce. Line 44 takes the smaller result. All three skip rules lead to line 41.

Line	As printed in the IRS worksheet
41	“Figure the tax on the amount on line 18. Use the 2025 Tax Rate Schedule in the Instructions for Form 1041”
42	“Add lines 27, 31, 37, 40, and 41”
43	“Figure the tax on the amount on line 1. Use the 2025 Tax Rate Schedule in the Instructions for Form 1041”
44	“Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 42 or line 43 here and on Form 1041, Schedule G, Part I, line 1a”

A worked case with assumed amounts: 0%, 15% and 20% layers

The IRS prints no filled-in example for this worksheet. The case below uses assumed amounts and only the printed arithmetic. Lines 8 and 12 are -0-, line 28 is reserved, lines 38 to 40 are skipped, and lines 41 to 44 need the Tax Rate Schedule, which this page does not reproduce. Every amount below is assumed or computed. Taxable income is $30,000 (assumed) with $2,000 of qualified dividends and a net gain of $25,000 on Schedule D (both assumed), with no unrecaptured section 1250 gain, no 28% rate gain and no Form 4952 amounts.

Line	What it holds	Amount
1	Form 1041, line 23, taxable income (assumed, used in the computed rows)	$30,000
2	Form 1041, line 2b(2), qualified dividends (assumed, used in the computed rows)	$2,000
3	Form 4952, line 4g, none (assumed, used in the computed rows)	$0
4	Form 4952, line 4e, none (assumed, used in the computed rows)	$0
5	Line 3 less line 4 (computed)	$0
6	Line 2 less line 5 (computed)	$2,000
7	Smaller (computed) of Schedule D line 18a and line 19, column (2), both assumed at $25,000	$25,000
9	Line 7 less line 8, which is -0- (computed)	$25,000
10	Lines 6 and 9 added (computed)	$27,000
11	Schedule D line 18b and line 18c, column (2), both assumed -0- (computed)	$0
13	Line 10 less line 12, which is -0- (computed)	$27,000
14	Line 1 less line 13 (computed)	$3,000
15	Smaller of line 1 and the printed $3,250 (computed)	$3,250
16	Smaller of line 14 and line 15 (computed)	$3,000
17a	Line 1 less line 10 (computed)	$3,000
17b	Smaller of line 1 and the printed $11,450 (computed)	$11,450
17c	Smaller of line 14 and line 17b (computed)	$3,000
18	Larger of line 17a and line 17c (computed)	$3,000
19	Line 15 less line 16, taxed at 0% (computed)	$250
20	Smaller of line 1 and line 13 (computed)	$27,000
21	From line 19 (computed)	$250
22	Line 20 less line 21 (computed)	$26,750
23	Smaller of line 1 and the printed $15,900 (computed)	$15,900
24	Lines 18 and 19 added (computed)	$3,250
25	Line 23 less line 24 (computed)	$12,650
26	Smaller of line 22 and line 25 (computed)	$12,650
27	Line 26 x 15% (computed)	$1,897.50
29	Lines 19 and 26 added (computed)	$12,900
30	Line 20 less line 29 (computed)	$14,100
31	Line 30 x 20% (computed)	$2,820
32	Smaller of line 9 and line 18b (computed)	$0
33	Lines 10 and 18 added (computed)	$30,000
34	From line 1 (computed)	$30,000
35	Line 33 less line 34, not below zero (computed)	$0
36	Line 32 less line 35, not below zero (computed)	$0
37	Line 36 x 25% (computed)	$0

Lines 10 and 13 are both $27,000 (computed), so line 14 is $30,000 minus $27,000, which is $3,000 (computed). Line 18 is the larger of $3,000 and $3,000, which is $3,000 (computed), so line 19 is $3,250 minus $3,000, which is $250 (computed) taxed at 0%. Line 26 is the smaller of $26,750 and $12,650, which is $12,650 (computed), and line 27 is that times 15%, which is $1,897.50 (computed). Line 30 is $27,000 minus $12,900, which is $14,100 (computed), and line 31 is that times 20%, which is $2,820 (computed). Lines 27, 31, 37 and 40 add to $4,717.50 (computed); lines 41 and 43 would then come from the Tax Rate Schedule, and line 44 is the smaller of line 42 and line 43.

A second case: the skip rule on line 15

When taxable income is no more than the first breakpoint, line 15 equals line 1 and the worksheet skips lines 20 through 40. The case below has $3,000 of taxable income, $1,000 of qualified dividends and a net gain of $2,000 on Schedule D (assumed).

Line	What it holds	Amount
1	Form 1041, line 23, taxable income (assumed, used in the computed rows)	$3,000
2	Form 1041, line 2b(2), qualified dividends (assumed, used in the computed rows)	$1,000
6	Line 2 less line 5 (computed)	$1,000
7	Smaller (computed) of Schedule D line 18a and line 19, column (2), both assumed at $2,000	$2,000
9	Line 7 less line 8, which is -0- (computed)	$2,000
10	Lines 6 and 9 added (computed)	$3,000
13	Line 10 less line 12, which is -0- (computed)	$3,000
14	Line 1 less line 13 (computed)	$0
15	Smaller of line 1 and the printed $3,250 (computed)	$3,000
16	Smaller of line 14 and line 15 (computed)	$0
17a	Line 1 less line 10 (computed)	$0
17b	Smaller of line 1 and the printed $11,450 (computed)	$3,000
17c	Smaller of line 14 and line 17b (computed)	$0
18	Larger of line 17a and line 17c (computed)	$0
19	Line 15 less line 16, taxed at 0% (computed)	$3,000

Line 15 is the smaller of $3,000 and the printed $3,250, which is $3,000 (computed), the same as line 1, so the worksheet goes straight to line 41. Line 18 is $0 (computed), so the tax on line 18 on line 41 is -0-, and line 42 is -0- (computed). Line 44 is the smaller of line 42 and line 43, so it is -0- here whatever line 43 shows.

Which edition this page reads

This page reads the 2025 Instructions for Schedule D (Form 1041), the file irs.gov served on November 6, 2026. The worksheet is on printed page 13. The $3,250, $11,450 and $15,900 breakpoints and the Tax Rate Schedule belong to 2025, so read the instructions for the year you are filing.

Common mistakes

Using this worksheet when Schedule D line 18a or line 19 in column (2), or Form 1041 line 23, is zero or less. The IRS sends that return to the Schedule G, Part I, line 1a instructions.
Entering something on line 28. The IRS prints it as reserved.
Working lines 20 to 40 when line 1 equals line 15. The worksheet says to skip to line 41.
Doing lines 38 to 40 when Schedule D line 18c, column (2), is zero or blank. The skip rule goes to line 41.
Forgetting that line 44 is the smaller of line 42 and line 43, and that it goes on Form 1041, Schedule G, Part I, line 1a.

Find the right next step for your situation

About how much do you have invested? Pick the range that fits; your next step appears immediately below.

About how much do you have invested? Under $100,000 $100,000 to under $250,000 $250,000 to under $1 million $1 million or more

Sources

2025 Instructions for Schedule D (Form 1041), Capital Gains and Losses: https://www.irs.gov/pub/irs-pdf/i1041sd.pdf
IRS, About Schedule D (Form 1041), Capital Gains and Losses: https://www.irs.gov/forms-pubs/about-schedule-d-form-1041

Read from the IRS documents linked above on November 6, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.

See the adviser match on this page