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Modeling Capital Gains

Use the "Schedule D Income" section to model different types of capital gains and losses.

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Enter short-term and long-term capital gains in the Schedule D Income section on their respective worksheets by clicking either pencil icon circled below. Losses (including carryforwards) should be entered as negative numbers.

Capital Gains 1

 

Capital Gains Worksheet:

Capital Gains 1a

Holistiplan does not automatically apply capital loss carryforwards from one tax year to future scenarios because each scenario is modeled independently. When capital loss carryforwards are present, you will see an alert like the one shown below.

Don't forget to apply the loss carryforward to the appropriate scenario(s).


Capital Gains 2

Holistiplan summarizes the amount and nature of carryforward losses as outlined below. When copying a return or scenario, the gains and losses copy over as well. Be careful about simply assuming that the capital gains from a previous year will automatically repeat in all future years.

Capital Gains 3a

 

In the example above, in 2025, there is a short-term capital loss carryover of $1,000 and a long-term capital loss carryover of $35,000. To apply the carryforward losses to the 2026 scenario, open the Capital Gains Worksheet and enter the amount in the loss carryover fields as a negative, as outlined below. You can also enter other gains or losses for the tax year in the other fields.

capital gains 3

Once all gains and losses are entered, including carryforward losses, you can review the summary shown on the main scenario analysis screen.

capital gains 9

 

AMT (Alternative Minimum Tax) Considerations

There are two versions of Schedule D used in tax calculations - one under the regular tax calculation, and an alternate version of Schedule D in the AMT (Alternative Minimum Tax) section.

For the vast majority of taxpayers, those two Schedule Ds will be identical. Holistiplan defaults to not  Show AMT (illustrated below as being toggled off).

Capital gains 4
You may toggle Show AMT to the "on" position, and the Capital Gains worksheet will look like the one below. (Note that the Regular Schedule D values and Schedule D for AMT values are identical, and the AMT capital gains field is not editable).

Capital Gains AMT1

To indicate different gains/losses for the AMT calculation, click the "unlink" icon circled below. This will allow you to make manual entries in the AMT column:

Capital Gains AMT2

 

How Gains/Losses are Netted on Schedule D:

In the prior example above, we've recognized a $39,000 capital loss for our client in 2025 ($4,000 STCL and $35,000 LTCL). Of that total loss, $3,000 can be used to reduce ordinary income, and the remaining $36,000 capital loss carryforward is applied to 2026. The client also has an additional $16,000 of long-term capital gains that are recognized in 2026, as shown below.

capital gains 8

Per IRS rules, gains and losses are netted in the following order:

  1. Short-Term Gains/Losses are netted together.
  2. Long-Term Gains/Losses are netted together.
  3. Short-Term and Long-Term losses are netted against each other, with the remaining amount taking on the character (short-term or long-term) of those remaining gains/losses.

 

Collectibles and Depreciation Recapture

For gains related to the sale of collectibles taxed at 28%, enter those gains in the Gains Taxed at 28% located at the bottom of the Capital Gains Worksheet.

Similarly, to enter depreciation recapture upon the sale of real estate, enter those capital gains as short-term or long-term gains depending on their holding period, and ALSO in the Section 1250 Gain (Line 19) - Depreciation Recapture. For more information on Section 1250 gains and how to best enter them, please see this separate article on Depreciation Recapture.

The question mark icons are clickable and will give additional information about what to enter in the specified fields.

Capital Gains 10