Updated October 18, 2026. Quick answer: The Schedule D Tax Worksheet figures the tax on your return when you have a capital gain amount on Schedule D lines 18 or 19 and your gains are positive, or when you file Form 4952 and have an amount on line 4g. It runs from line 1 to line 47. The result on line 47 is entered on Form 1040, line 16.
What this worksheet is for
“Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero and lines 15 and 16 of Schedule D are gains or if you file Form 4952 and you have an amount on line 4g”. The instructions then give the alternative: “Otherwise, complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 16”. That worksheet is explained on the Qualified Dividends and Capital Gain Tax Worksheet page.
“Before completing this worksheet, complete Form 1040, 1040-SR, or 1040-NR through line 15.” The same page states an exception: “Don’t use the Qualified Dividends and Capital Gain Tax Worksheet or this worksheet to figure your tax if:” one case is when “Line 15 or line 16 of Schedule D is zero or less and you have no qualified dividends”, and the other is when “Form 1040, 1040-SR, or 1040-NR, line 15, is zero or less.” The Schedule D form is mapped on the Schedule D (Form 1040) page, and the other worksheets in this series are on the Form 1040 worksheets page.
The worksheet line by line
The worksheet has 47 lines on two pages. Filing status amounts on lines 15, 19 and 26, and the rates multiplied on lines 31, 34, 40 and 43, are printed on the worksheet and are deliberately not repeated here. Read them on your own copy.
| Line | What the worksheet says |
|---|---|
| 1 | “Enter your taxable income from Form 1040, 1040-SR, or 1040-NR, line 15.” |
| 2 | “Enter your qualified dividends from Form 1040, 1040-SR, or 1040-NR, line 3a” |
| 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 15 or line 16 of 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 18 and 19 of 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 | A list of amounts by filing status is printed on this line. Read the amount for your status on the worksheet itself. |
| 16 | “Enter the smaller of line 1 or line 15” |
| 17 | “Enter the smaller of line 14 or line 16” |
| 18 | “Subtract line 10 from line 1. If zero or less, enter-0-” |
| 19 | “Enter the smaller of line 1 or” one of the amounts printed under the line for your filing status |
| 20 | “Enter the smaller of line 14 or line 19” |
| 21 | “Enter the larger of line 18 or line 20” |
| 22 | “Subtract line 17 from line 16.” The worksheet states the rate that applies to this amount on the line itself. |
| After 22 | “If lines 1 and 16 are the same, skip lines 23 through 43 and go to line 44.” |
| 23 | “Enter the smaller of line 1 or line 13” |
| 24 | “Enter the amount from line 22.” |
| 25 | “Subtract line 24 from line 23. If zero or less, enter-0-” |
| 26 | A list of amounts by filing status is printed on this line. Read the amount for your status on the worksheet itself. |
| 27 | “Enter the smaller of line 1 or line 26” |
| 28 | “Add lines 21 and 22” |
| 29 | “Subtract line 28 from line 27. If zero or less, enter-0-” |
| 30 | “Enter the smaller of line 25 or line 29” |
| 31 (Continued page) | “Multiply line 30 by” the rate printed on the line |
| 32 | “Add lines 24 and 30” |
| After 32 | “If lines 1 and 32 are the same, skip lines 33 through 43 and go to line 44.” |
| 33 | “Subtract line 32 from line 23” |
| 34 | “Multiply line 33 by” the rate printed on the line |
| After 34 | “If Schedule D, line 19, is zero or blank, skip lines 35 through 40 and go to line 41.” |
| 35 | “Enter the smaller of line 9 above or Schedule D, line 19” |
| 36 | “Add lines 10 and 21” |
| 37 | “Enter the amount from line 1 above” |
| 38 | “Subtract line 37 from line 36. If zero or less, enter-0-” |
| 39 | “Subtract line 38 from line 35. If zero or less, enter-0-” |
| 40 | “Multiply line 39 by” the rate printed on the line |
| After 40 | “If Schedule D, line 18, is zero or blank, skip lines 41 through 43 and go to line 44.” |
| 41 | “Add lines 21, 22, 30, 33, and 39” |
| 42 | “Subtract line 41 from line 1” |
| 43 | “Multiply line 42 by” the rate printed on the line |
| 44 | “Figure the tax on the amount on line 21.” The line then names two methods: “use the Tax Table to figure the tax” or “use the Tax Computation Worksheet”, with the dividing amount printed on the line. |
| 45 | “Add lines 31, 34, 40, 43, and 44” |
| 46 | “Figure the tax on the amount on line 1.” It uses the same two methods as line 44. |
| 47 | “Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 45 or line 46.” “include this amount on Form 1040, 1040-SR, or 1040-NR, line 16.” |
A worked example
This example is an illustration, not an IRS example. It covers only lines 1 to 14, which are pure subtraction and comparison, and every input is invented. It assumes Schedule D line 18 is 2,000 and line 19 is zero, and it never reaches the rate steps.
| Line | Input or step (illustration, not an IRS example) | Amount |
|---|---|---|
| Line 1 | Taxable income, Form 1040 line 15 | $70,000 |
| Line 2 | Qualified dividends | $3,000 |
| Lines 3 and 4 | No Form 4952, so both are zero | $0 |
| Line 5 | Line 3 minus line 4, not below zero | $0 (computed) |
| Line 6 | Line 2 minus line 5 | $3,000 (computed) |
| Line 7 | Suppose the smaller of Schedule D lines 15 and 16 is | $10,000 (computed) |
| Line 8 | Smaller of lines 3 and 4 | $0 (computed) |
| Line 9 | Line 7 minus line 8 | $10,000 (computed) |
| Line 10 | Lines 6 plus 9 | $13,000 (computed) |
| Line 11 | Suppose Schedule D line 18 is 2,000 and line 19 is 0 | $2,000 |
| Line 12 | Smaller of lines 9 and 11 | $2,000 (computed) |
| Line 13 | Line 10 minus line 12 | $11,000 (computed) |
| Line 14 | Line 1 minus line 13 | $59,000 (computed) |
Line 14 is the taxable income left after the capital gain and dividend portions on lines 10 to 13 are set aside for the later steps.
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Where the number comes from
Line 1 starts from Form 1040, line 15. Line 2 is the qualified dividends on Form 1040, line 3a. Lines 7, 11 and 35 come from Schedule D lines 15, 16, 18 and 19, which are explained on the Schedule D (Form 1040) page. Lines 3 and 4 come from Form 4952.
Lines 44 and 46 send you to the tax tables. They use the Tax Table or the Tax Computation Worksheet, which is described on the Tax Computation Worksheet page. If you file Form 2555, line 1 is different: “if you are filing Form 2555 (relating to foreign earned income), enter instead the amount from line 3 of the Foreign Earned Income Tax Worksheet in the instructions for Form 1040, line 16.” See the Foreign Earned Income Tax Worksheet page.
Where it goes next
Line 47 ends with “include this amount on Form 1040, 1040-SR, or 1040-NR, line 16.” That line is explained on the Form 1040 line 16 page. For Form 2555 filers the worksheet adds “enter it on line 4 of the Foreign Earned Income Tax Worksheet in the Instructions for Form 1040.”
Edition and line numbers
This page reads the 2025 Instructions for Schedule D (Form 1040), the archived copy of the file; the worksheet is for the tax year 2025 return, filed in 2026. Check the tax year printed on the worksheet in your own instructions and use that year’s line numbers, because a different year’s worksheet can number or word its lines differently.
Common mistakes
- Using this worksheet when neither condition applies. The instructions say “Otherwise, complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Form 1040, line 16”
- Starting before the return is ready. The instructions say “Before completing this worksheet, complete Form 1040, 1040-SR, or 1040-NR through line 15.”
- Entering line 47 without comparing the two methods. The line says “Enter the smaller of line 45 or line 46.”
Related: Schedule D (Form 1040), Qualified Dividends and Capital Gain Tax Worksheet, Form 1040 line 16, and Form 1040.
Sources
- Instructions for Schedule D (Form 1040), Capital Gains and Losses (2025): https://www.irs.gov/pub/irs-pdf/i1040sd.pdf
- Form 1040 (2025): https://www.irs.gov/pub/irs-pdf/f1040.pdf
Read from the IRS documents linked above on October 18, 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.