Pennsylvania PA Schedule D - Sale, Exchange or Disposition of Property

PA Schedule D - Sale, Exchange or Disposition of Property
2023 PA Schedule D - Sale, Exchange or Disposition of Property (Form and Instructions) (PA-40 D)
IMPORTANT: FILL IN FORM MUST BE DOWNLOADED ONTO YOUR COMPUTER PRIOR TO COMPLETING
2301310054

PA SCHEDULE D

Sale, Exchange or Disposition of Property
PA-40 D (EX) 03-23 (FI)
PA Department of Revenue

2023

OFFICIAL USE ONLY

If you need more space, you may photocopy.

START Name of the taxpayer filing this schedule

Social Security Number (shown first)

➜

Taxpayer

Spouse

Joint

Important: A taxpayer and spouse must complete separate schedules to report their gains or losses or if any amounts are reported on Lines 3 through
10 of PA Schedule D. However, if all the gains and losses were realized on a joint basis, one schedule may be completed. Complete the oval to
indicate whether the gains and losses included on the schedule are from the taxpayer, spouse or joint. One spouse may not use a loss to reduce the
other spouse’s gains. When reporting the sale of jointly owned property that is not reported on a joint PA Schedule D, each must show their share of the
sale on their separate PA Schedule D. Read the instructions. Enter all sales, exchanges or other dispositions of real or personal tangible and intangible
property, including inherited property. Amounts from Federal Schedule D may not be correct for PA income tax purposes. Nonresidents should read
carefully the instructions concerning intangible property. If the result is a loss, fill in the oval next to the line.
(a)
Describe the property:
100 shares of XYZ stock, or
10 acres in Dauphin County

(b)
Date acquired:
Month/day/year

MM/DD/YY

(c)
Date sold:
Month/day/year

MM/DD/YY

(d)
Gross sales price
less expenses
of sale

(e)
Cost or adjusted
basis of the
property sold

(f)
Gain or loss:
(d) minus (e)
(If a loss, fill in the oval).
LOSS

1.

LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS
LOSS

2. Net gain (loss) from above sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Gain from installment sales from PA Schedule D-1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.
3.

4. Taxable distributions from C corporations. . . . . . . . . . . .Enter total distribution
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Minus adjusted basis
5. Net gain (loss) from the sale of 6-1-71 property from PA Schedule D-71. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Net PA S corporation and partnership gain (loss) from your PA Schedule(s) RK-1 or NRK-1 . . . . . . . . . . . . . . . . . . . .

=

4.
5.
6.

LOSS
LOSS

Taxable gain from selling a principal residence. Complete and submit PA Schedule 19. Complete Columns (a) through (e) and enter your total gain on Line 7.
(a)
Address of
residence

MM/DD/YY
➜

(b)
Date acquired:
Month/day/year

(c)
Date sold:
Month/day/year

(d)
Gross sales price
less expenses of sale

(e)
Cost or adjusted basis of
the property sold

(f)
Gain or loss:
(d) minus (e)

7. Taxable gain from the sale of your principal residence. If you realized a loss on the sale of your principal residence, enter a zero.
If you realized a gain/loss on the sale of the nonresidential portion of your principal residence, enter the information on Line 1 . . . . 7.
8. Taxable distributions from partnerships from REV-999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Taxable distributions from PA S corporations from REV-998. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Taxable gain from exchange of insurance contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.
11. Total PA Taxable Gain (Loss). Add Lines 2 through 10. Enter on Line 5 of your PA-40. (If a net loss, fill in the oval). . .

2301310054
Reset Entire Form

TOP OF PAGE

LOSS

11.

2301310054
NEXT PAGE

PRINT

2023
Instructions for PA-40 Schedule D

Sale, Exchange or Disposition of Property

PA-40 D IN 03-23

WHAT’S NEW
Effective for transactions on or after January 1, 2023 Pennsylvania conforms to the federal tax treatment of deferring
gains (loss) on like-kind exchanges under IRC Section 1031.

GENERAL INFORMATION
PURPOSE OF SCHEDULE
Use PA-40 Schedule D to report the amount of gain or loss
from the sale, exchange or disposition of:
● Stocks;
● Bonds;
● Real estate;
● Business interests;
● Business property;
● Rental property;
● Property held by a pass-through entity; and
● Any other various types of investment or personal
property.

V

FORM INSTRUCTIONS
IDENTIFICATION INFORMATION
NAME
Enter the name of the taxpayer. If a jointly filed return, enter
the name of the primary taxpayer (name shown first on the
PA-40, Personal Income Tax Return). Enter the primary taxpayer’s name even if reporting the income for the spouse.
SOCIAL SECURITY NUMBER
Enter the Social Security number (SSN) of the taxpayer.
Enter the primary taxpayer’s SSN also when reporting gain
or loss for the spouse.
TAXPAYER OVAL
Complete the taxpayer oval to indicate the gain or loss reported is from the taxpayer whose name appears on the
name line.
SPOUSE OVAL
Complete the spouse oval to indicate the gain or loss reported was earned by the spouse listed on a PA-40, Personal Income Tax Return, filed using the Married, Filing
Jointly filing status.

Refer to the PA Personal Income Tax Guide - Net Gains or
Losses from the Sale, Exchange or Disposition of Property
section for additional information.

NOTE: A taxpayer and spouse must complete separate schedules to report their gains or losses or if any
amounts are reported on Lines 3 through 10.

RECORDING DOLLAR AMOUNTS

JOINT OVAL
Complete the joint oval if all the gains and losses reported
by the taxpayer and spouse are being reported from jointly
owned property.

Show money amounts in whole-dollars only. Eliminate any
amount less than $0.50 and increase any amount that is
$0.50 or more to the next highest dollar.

WHO MUST COMPLETE
PA-40 Schedule D must be completed and included with an
originally filed PA-40 if there are any transactions involving
the sale, exchange or disposition of property. PA-40 Schedule D must be completed even if the only transaction is to
report a loss.
CAUTION: Do not use federal Schedule D to report
gains and losses from the sale, exchange or disposition of property.
An amended PA Schedule D must be included with Schedule PA-40 X if increases or decreases in income amounts
on PA Schedule D are discovered after an original or other
amended return is filed with the department. Section III on
Page 2 of Schedule PA-40 X must be completed to explain
any increase or decrease to the amount of gains or losses
from the sale, exchange or disposition of property reported
on an amended PA-40, Personal Income Tax Return.
www.revenue.pa.gov
PREVIOUS PAGE

NOTE: Do not use the joint oval to report joint gains
and losses if any gain or loss is reported by the taxpayer and/or spouse separately. In such cases, the joint
gains or losses must be split and the taxpayer and spouse
must show the separate share of the joint gain or loss on
the separate PA-40 Schedule D prepared for each.
IMPORTANT: One spouse may not use a loss to reduce the other spouse’s gains. Each spouse must show
his/her share of the sale on their separate PA Schedule D.

GENERAL INSTRUCTIONS
REPORTING TRANSACTIONS
Report all sales, exchanges, and dispositions of property
using PA income tax rules, and PA income tax basis, in
the year in which the transaction occurred.
Summaries or groups of transactions as reported on brokerage statements or summaries of the sales of stocks, bonds
and other financial instruments sold on the major financial
exchanges on separately prepared statements may be used
in lieu of entering each sale, exchange or disposition of
PA-40 D
NEXT PAGE

1

property on PA Schedule D. All other transactions must be
entered separately on PA Schedule D.

II. If the property was other than income-producing
property (a personal automobile or furniture), then:

If a brokerage or summary statement is used, a copy of the
statement must be provided with the return. Electronically
filed returns will no longer permit entry of an unlimited number of transactions. Brokerage or summary statements of
transactions will be required to be included as a PDF attachment with the return or faxed in to the department unless copies of the brokerage statements are already
included with the federal e-filed return.

● If the adjusted basis in Column (e) is less than or equal
to Column (d), enter the gain or zero in Column (f).

Unless the specific instructions require a different Pennsylvania schedule or as previously noted above, report each
sale, exchange, or disposition of property on PA Schedule
D.
OIL AND GAS PIPELINE OR WELL ACCESS
EASEMENTS AND RIGHT OF WAYS
Payments received for permanent right of ways and easements as well as express easements (15 years or longer in
length) are considered a sale of a portion of the landowner’s
property. The percentage of square footage of the land included in the permanent easement or right of way to the total
square footage of the entire property (pro-rata method) multiplied by the total adjusted basis of the land (or any other
reasonable method for determining basis of the property)
should be used in determining the gain or loss on the property. If any method other than the pro-rata method is used,
approval for use of the alternative method must be obtained
from the Department of Revenue’s Office of Chief Counsel
prior to filing the return.

LINE INSTRUCTIONS
LINE 1
COLUMN (a)
List and describe the property sold or otherwise disposed of
for cash or for other property.

● If the adjusted basis in Column (e) is greater than
Column (d), enter zero in Column (f). A loss on the
sale of personal property cannot be reported.
IMPORTANT: Only losses from transactions entered
into for profit may be deducted. Indicate a loss by filling in the oval.
For taxpayers reporting the sales of exempt obligations, Include the issue or DTD date of the exempt obligation in the description of the items sold. The gain (loss)
realized on the sale, exchange, or disposition of the following obligations must be reported if the original issue or DTD
date was on or after Feb. 1, 1994:
● Direct obligations of the U.S. government, such as federal treasury bills and treasury notes;
● Obligations of certain agencies, instrumentalities, and
territories of the U.S. government; and
● Direct obligations of the Commonwealth of Pennsylvania and its political subdivisions.
CAUTION: Do not report the gain (loss) realized on the
disposition of the above obligations if the original issue
or DTD date was prior to Feb. 1, 1994, regardless of the
date the obligation was acquired. Any loss realized on such
dispositions may not be used to offset other gains.
NOTE: Gains or losses from exempt obligations of
other states or political subdivisions not located in
Pennsylvania must be reported regardless of the DTD date.

LINE 2
Total Column (f) and enter the net amount. Gains and losses
for Line 2 may be offset if for the same taxpayer.

COLUMN (b)
Enter the month, day, and year acquired. If the properties were acquired over time or if entering a summary
line for multiple transactions, VARIOUS may be entered.

If a loss, complete the loss oval and enter the amount as a
negative number.

COLUMN (c)
Enter the month, day, and year sold. If entering a summary
line for multiple transactions, VARIOUS may be entered.

Enter the taxable gain from each PA Schedule D-1, Form
REV-1689, Computation of Installment Sale Income.

COLUMN (d)
Enter the gross sales price or fair market value of cash and
property received less the applicable expenses of sale.
COLUMN (e)
Enter the cost or adjusted basis of the property sold.
COLUMN (f)
Determine whether the property was either I or II, and follow
the appropriate instructions:
I. If the property was income- producing property, such
as stock, bonds, an ownership interest in a business, a
rental property, a patent or copyright, or the property was
held in connection with a business, profession, or occupation (but not inventory or an operational asset), then
subtract Column (e) from Column (d). Enter either the
gain or the loss or zero in Column (f).
2

PA-40 D
PREVIOUS PAGE

LINE 3

CAUTION: The installment sales method may not be
elected for: reporting gains from the sale of intangible personal property, such as stocks, bonds, partnership
or other ownership interests; or reporting transactions where
the object is the lending of money or the rendering of services.

LINE 4
If a shareholder in a C corporation, the excess of the fair
market value of a distribution (other than a dividend) in excess of current or accumulated earnings and profits over the
adjusted basis of the stock must be reported as taxable
gain. The basis of the stock or shares must be decreased,
but not below zero, by any distribution that is not taxable as a
dividend on Line 3 of the PA-40, Personal Income Tax Return.
www.revenue.pa.gov
NEXT PAGE

Example: B Corp distributes from its capital account
$100,000 to Karen, the only stockholder. Her adjusted
basis in her stock is $75,000. The distribution is not from
the C corporation’s earnings and profits, so it is not a
taxable dividend. Karen must reduce her basis from
$75,000 to zero. She reports $100,000 on the Enter total
distribution line, and $75,000 on the Minus adjusted
basis line. She reports the remaining $25,000 as a gain
on Line 4 of her PA Schedule D.

LINE 5
Enter the amount of gain (loss) on the sale of June 1, 1971
property from Form REV-1742, PA Schedule D-71. Include
Form REV-1742 with the PA-40, Personal Income Tax Return.

LINE 6

LINE 8
Enter the amount of any gain realized from other partnership
distributions that exceed ownership basis in the partnership.
REV-999, Partner PA Outside Tax Basis in a Partnership
Worksheet must be completed and submitted with the PA40, Personal Income Tax Return.

LINE 9
Enter the amount of any gain realized from other PA S corporation distributions that exceed ownership basis in the PA
S corporation. REV-998, Shareholder Tax Basis in PA S Corporation Stock Worksheet must be completed and submitted
with the PA-40, Personal Income Tax Return.

LINE 10

Enter the taxable gain or loss from Line 4 of PA Schedule(s)
RK-1 or Line 2 PA Schedule(s) NRK-1. If PA Schedules RK1 or NRK-1 are not provided, enter the appropriate amounts
of gain or loss from the federal Schedule(s) K-1. Include a
statement providing the entity name and FEIN along with the
gain or loss by entity if a gain or loss from any pass-through
entity is reported on this line.

If a sale, exchange, or disposition of an insurance contract
does not qualify as tax-exempt under IRC Section 1035, report the taxable exchange of any insurance contracts reported for federal income tax purposes. If more than one
taxable exchange of contracts, report the total gain realized.
See the instructions beginning on Page 18 of the PA-40IN,
Personal Income Tax Return Instructions Booklet, for a
description of the tax-exempt exchanges covered under IRC
Section 1035.

LINE 7

LINE 11

PA law excludes the qualifying gain from the sale of a principal residence. Generally, if a home was owned and the
property was used as a principal residence for at least two
of the five years preceding the sale, the gain is exempt.
However, a gain must be reported if the requirements for
exempting the gain are not met. For more information refer
to the Sale of Your Principal Residence brochure (REV625). If not qualifying to exclude the gain from the sale of a
principal residence, report the taxable gain, if any, on this
line. If a loss was realized from the sale of a principal residence, enter a zero. If any portion of the principal residence
was used for business or rental purposes, PA Schedule 19
must be completed and submitted with the PA-40, Personal
Income Tax Return. Report the gain or loss on the business
or rental portion of the sale of a principal residence on Line
1 of PA Schedule D.

Add the amounts included on Lines 2 through 10. Fill in the
oval if the amount is negative. If the PA-40, Personal Income Tax Return, is being filed using the Married, Filing
Jointly filing status, a taxpayer and spouse must use the following to determine what amount to report on Line 5 of the
PA-40:
I. If Line 11 for both the taxpayer and spouse separately
prepared PA-40 Schedule Ds is a gain, add the amounts
from Line 11 and include on Line 5 of the PA-40;
II. If Line 11 for both the taxpayer and spouse separately
prepared PA-40 Schedule Ds is a loss, add the amounts
from Line 11 and include the amount on Line 5 of the
PA-40; or
III.If Line 11 for the taxpayer is a gain and Line 11 for the
spouse is a loss (or vice versa), enter the amount of taxpayer’s (or spouse’s) gain on Line 5 of the PA-40.

www.revenue.pa.gov
PREVIOUS PAGE

PA-40 D

3

RETURN TO FORM