What should Kahn attach to Form 1040 when reporting a Capital Gain Distribution?

When reporting a capital gain distribution on Form 1040, it is essential to accurately reflect the nature of the income. Schedule D is the correct form to attach because it is specifically designed for reporting capital gains and losses. This includes capital gain distributions that may come from mutual funds or other investments.

Schedule D provides the structure needed to summarize total capital gains, losses, and any capital gain distributions separately. Completing this schedule allows taxpayers to ensure that they comply with IRS reporting requirements for investment income.

In contrast, the other schedules serve different purposes: Schedule C is used for reporting income and expenses from a business or self-employment; Schedule B focuses on interest and dividend income, and Schedule E is used for reporting rental income, royalties, partnerships, S corporations, estates, trusts, and real estate. Using the appropriate schedule is crucial for compliance and accurate tax reporting.