--- title: How are Capital Gains Reported on Form 1120-S Taxed? description: Reporting capital gains as a business when taxed as an S-corp means using two forms. One of those forms is called 1120-S. We will go through what this form is and how capital gains are reported on it. image: https://www.realized1031.com/hubfs/tax-1386255257.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # How are Capital Gains Reported on Form 1120-S Taxed? Posted Nov 1, 2022 ![tax-1386255257](https://www.realized1031.com/hs-fs/hubfs/tax-1386255257.jpg?width=750&height=392&name=tax-1386255257.jpg) Reporting capital gains as a business when taxed as an S-corp means using two forms. One of those forms is called 1120-S. We will go through what this form is and how capital gains are reported on it. ### What Is Form 1120-S? [IRS Form 1120-S](https://www.irs.gov/pub/irs-pdf/f1120s.pdf) is titled U.S. Income Tax Return for an S Corporation. This form shows corporate income for companies that elected to be taxed as an S-corp. This taxation status means the corporation is a pass-through entity. Income, losses, deductions, and credits pass through to the company’s shareholders for federal tax purposes. Form 1120-S is related to Schedule D from the 1040 tax filing package. In the next section, we’ll see how information transfers from Schedule D to the 1120-S. ### Reporting Capital Gains On Form 1120-S The 1120-S is formally called Schedule D (Form 1120-S). Information from Schedule D carries into the 1120-S. On the 1120-S is line 22 (b) — Tax from Schedule D (Form 1120-S). This value is the gains tax from Schedule D and determines if the corporation has a tax liability.  Specifically for capital gains, there are two lines to report them in the Schedule K section of Form 1120-S: - Line 7 — Net short-term capital gain (loss) (attach Schedule D (Form 1120-S)) - Line 8 (a) — Net long-term capital gain (loss) (attach Schedule D (Form 1120-S)) What happens on Schedule D that we are transferring the information to Form 1120-S? Schedule D is used to file Capital Gains and Losses. It consists of three parts: - Part I — Short-Term Capital Gains and Losses—Generally Assets Held One Year or Less - Part II — Long-Term Capital Gains and Losses—Generally Assets Held More Than One Year - Part III — Summary Form 1120-S is concerned with Parts I and II. These two parts are where capital assets are listed, and any gain or loss is calculated. As you can see, there isn’t much to reporting capital gains on Form 1120-S. To ensure correct reporting, it’s best to work with a tax accountant.   This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. 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This form shows corporate income for companies that elected to be taxed as an S-corp. This taxation status means the corporation is a pass-through entity. Income, losses, deductions, and credits pass through to the company’s shareholders for federal tax purposes. Form 1120-S is related to Schedule D from the 1040 tax filing package. In the next section, we’ll see how information transfers from Schedule D to the 1120-S. Reporting Capital Gains On Form 1120-S The 1120-S is formally called Schedule D (Form 1120-S). Information from Schedule D carries into the 1120-S. On the 1120-S is line 22 (b) — Tax from Schedule D (Form 1120-S). This value is the gains tax from Schedule D and determines if the corporation has a tax liability. Specifically for capital gains, there are two lines to report them in the Schedule K section of Form 1120-S: Line 7 — Net short-term capital gain (loss) (attach Schedule D (Form 1120-S)) Line 8 (a) — Net long-term capital gain (loss) (attach Schedule D (Form 1120-S)) What happens on Schedule D that we are transferring the information to Form 1120-S? Schedule D is used to file Capital Gains and Losses. It consists of three parts: Part I — Short-Term Capital Gains and Losses—Generally Assets Held One Year or Less Part II — Long-Term Capital Gains and Losses—Generally Assets Held More Than One Year Part III — Summary Form 1120-S is concerned with Parts I and II. These two parts are where capital assets are listed, and any gain or loss is calculated. As you can see, there isn’t much to reporting capital gains on Form 1120-S. To ensure correct reporting, it’s best to work with a tax accountant. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.", "articleSection" : [ "Capital Gains" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2022-11-02T00:00:00+0000", "datePublished" : "2022-11-02T00:00:00+0000", "description" : "Reporting capital gains as a business when taxed as an S-corp means using two forms. One of those forms is called 1120-S. 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