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Instructions for Schedule D (Form 1040) 2003 Tax Year

Specific Instructions

This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Lines 1 and 8

Enter all sales and exchanges of capital assets, including stocks, bonds, etc., and real estate (if not reported on Form 4684, 4797, 6252, 6781, or 8824). But do not report the sale or exchange of your main home unless required (see page D-2). Include these transactions even if you did not receive a Form 1099-B or 1099-S (or substitute statement) for the transaction. You can use stock ticker symbols or abbreviations to describe the property as long as they are based on the descriptions of the property as shown on Form 1099-B or 1099-S (or substitute statement).

Use Schedule D-1 to list additional transactions for lines 1 and 8. Use as many Schedules D-1 as you need. Enter on Schedule D, lines 2 and 9, the combined totals from all your Schedules D-1.

Caution

Add the following amounts reported to you for 2003 on Forms 1099-B and 1099-S (or substitute statements) that you are not reporting on another form or schedule included with your return: (a) proceeds from transactions involving stocks, bonds, and other securities and (b) gross proceeds from real estate transactions (other than the sale of your main home if you are not required to report it). If this total is more than the total of lines 3 and 10, attach an explanation of the difference.

Column (b)—Date Acquired

Enter in this column the date the asset was acquired. Use the trade date for stocks and bonds traded on an exchange or over-the-counter market. For stock or other property sold short, enter the date the stock or property was delivered to the broker or lender to close the short sale.

The date acquired for an asset you held on January 1, 2001, for which you made an election to recognize any gain in a deemed sale is the date of the deemed sale and reacquisition.

If you disposed of property that you acquired by inheritance, report the gain or (loss) on line 8 and enter “INHERITED” in column (b) instead of the date you acquired the property.

If you sold a block of stock (or similar property) that was acquired through several different purchases, you may report the sale on one line and enter “VARIOUS” in column (b). However, you still must report the short-term gain or (loss) on the sale in Part I and the long-term gain or (loss) in Part II.

Column (c)—Date Sold

Enter in this column the date the asset was sold. Use the trade date for stocks and bonds traded on an exchange or over-the-counter market. For stock or other property sold short, enter the date you sold the stock or property you borrowed to open the short sale transaction.

Column (d)—Sales Price

Enter in this column either the gross sales price or the net sales price from the sale. If you sold stocks or bonds and you received a Form 1099-B (or substitute statement) from your broker that shows gross sales price, enter that amount in column (d). But if Form 1099-B (or substitute statement) indicates that gross proceeds minus commissions and option premiums were reported to the IRS, enter that net amount in column (d). If you enter the net amount in column (d), do not include the commissions and option premiums from the sale in column (e).

You should not have received a Form 1099-B (or substitute statement) for a transaction merely representing the return of your original investment in a nontransferable obligation, such as a savings bond or a certificate of deposit. But if you did, report the amount shown on Form 1099-B (or substitute statement) in both columns (d) and (e).

Caution

Be sure to add all sales price entries on lines 1 and 8, column (d), to amounts on lines 2 and 9, column (d). Enter the totals on lines 3 and 10.

Column (e)—Cost or Other Basis

In general, the cost or other basis is the cost of the property plus purchase commissions and improvements, minus depreciation, amortization, and depletion. If you inherited the property, got it as a gift, or received it in a tax-free exchange, involuntary conversion, or “wash sale” of stock, you may not be able to use the actual cost as the basis. If you do not use the actual cost, attach an explanation of your basis.

If you sold stock, adjust your basis by subtracting all the nontaxable distributions you received before the sale. Also adjust your basis for any stock splits. See Pub. 550 for details.

If you elected to recognize gain on an asset held on January 1, 2001, your basis in the asset is its closing market price or fair market value, whichever applies, on the date of the deemed sale and reacquisition, whether the deemed sale resulted in a gain or an unallowed loss.

You may elect to use an average basis for all shares of a mutual fund if you acquired the shares at various times and prices and you left the shares on deposit in an account handled by a custodian or agent who acquired or redeemed those shares. If you are reporting an average basis, include “AVGB” in column (a) of Schedule D. For details on making the election and how to figure average basis, see Pub. 564.

The basis of property acquired by gift is generally the basis of the property in the hands of the donor. The basis of property acquired from a decedent is generally the fair market value at the date of death. See Pub. 551 for details.

Increase the cost or other basis of an original issue discount (OID) debt instrument by the amount of OID that has been included in gross income for that instrument. See Pub. 550 for details.

If a charitable contribution deduction is allowed because of a bargain sale of property to a charitable organization, the adjusted basis for purposes of determining gain from the sale is the amount that has the same ratio to the adjusted basis as the amount realized has to the fair market value. See Pub. 544 for details.

Increase your cost or other basis by any expense of sale, such as broker's fees, commissions, state and local transfer taxes, and option premiums, before making an entry in column (e), unless you reported the net sales price in column (d).

For more details, see Pub. 551.

Column (f)—Gain or (Loss) for the Entire Year

You must make a separate entry in this column for each transaction reported on lines 1 and 8 and any other line(s) that applies to you. For lines 1 and 8, subtract the amount in column (e) from the amount in column (d). Enter negative amounts in parentheses.

Column (g)—Post-May 5 Gain or (Loss)

Enter in this column all gains and losses you reported in column (f) from sales, exchanges, or conversions (including installment payments received) after May 5, 2003. However, do not include gain attributable to unrecaptured section 1250 gain, collectibles gains and losses (defined on page D-8) or eligible gain on qualified small business stock (defined on page D-4).

Line 7a

Enter on line 7a, column (g), your post-May 5 short-term loss, if any. If the total of lines 1 through 5 in column (g) is a gain, enter zero.

Example 1.   Bill and Jean Birch had the following short-term capital gains and losses for 2003.
  1. A sale of stock on April 10, 2003, at a loss of ($2,000).
  2. A sale of stock on July 7, 2003, at a gain of $2,000.
  3. A sale of stock on September 15, 2003, at a loss of ($3,000).

  The Birches enter a loss of ($1,000) on line 7a, column (g), consisting of the post-May 5 short-term gain of $2,000 from item 2 and the post-May 5 short-term loss of ($3,000) from item 3.

Example 2.   Frank and Barbara Elm had the following short-term capital gains and losses for 2003.
  1. A sale of stock on March 5, 2003, at a gain of $2,500.
  2. A sale of stock on June 9, 2003, at a gain of $4,000.
  3. A sale of stock on September 20, 2003, at a loss of ($3,000).

  The Elms enter zero on line 7a, column (g), since they have a post-May 5 net short-term gain of $1,000, consisting of the post-May 5 short-term gain of $4,000 from item 2 and the post-May 5 short-term loss of ($3,000) from item 3.

Line 18

Limit on Capital Losses.   For 2003, you may deduct capital losses up to the amount of your capital gains plus $3,000 ($1,500 if married separately).

Capital Loss Carryover.   You have a capital loss carryover from 2003 to 2004 if you have a loss on line 17a and either:
  • That loss is more than the loss on line 18 or
  • Form 1040, line 38, is less than zero.

  To figure any capital loss carryover to 2004, you will use the Capital Loss Carryover Worksheet in the 2004 Instructions for Schedule D. If you want to figure your carryover now, see Pub. 550.

  
Tip

  You will need a copy of your 2003 Form 1040 and Schedule D to figure your capital loss carryover to 2004.

Tax Computation Using Maximum Capital Gains Rates

First, complete Form 1040 through line 40 (taxable income). Then, unless the Exception below applies, complete Part IV of Schedule D to figure your tax if:

  • Both lines 16 and 17a of Schedule D are gains or
  • You have qualified dividends on Form 1040, line 9b.

If you cannot use Part IV of Schedule D to figure your tax, see the Instructions for Form 1040, line 41.

Exception.   If Form 1040, line 40, is zero, enter zero on Form 1040, line 41, and do not complete Part IV of Schedule D.

Line 19

If you complete Part IV, complete the worksheet below if any of the following apply for 2003.

  • You sold or otherwise disposed of section 1250 property (generally, real property that you depreciated) held more than 1 year.
  • You received installment payments for section 1250 property held more than 1 year for which you are reporting gain on the installment method.
  • You received a Schedule K-1 from an estate or trust, partnership, or S corporation that shows “unrecaptured section 1250 gain.”
  • You received a Form 1099-DIV or Form 2439 from a real estate investment trust or regulated investment company (including a mutual fund) that reports “unrecaptured section 1250 gain.”
  • You reported a long-term capital gain from the sale or exchange of an interest in a partnership that owned section 1250 property.

Instructions for the Unrecaptured Section 1250 Gain Worksheet

Lines 1 through 3.   If you had more than one property described on line 1, complete lines 1 through 3 for each property on a separate worksheet. Enter the total of the line 3 amounts for all properties on line 3 and go to line 4.

Line 4.   To figure the amount to enter on line 4, follow the steps below for each installment sale of trade or business property held more than 1 year.

Step 1.   Figure the smaller of (a) the depreciation allowed or allowable or (b) the total gain for the sale. This is the smaller of line 22 or line 24 of your 2003 Form 4797 (or the comparable lines of Form 4797 for the year of sale) for the property.

Step 2.   Reduce the amount figured in step 1 by any section 1250 ordinary income recapture for the sale. This is the amount from line 26g of your 2003 Form 4797 (or the comparable line of Form 4797 for the year of sale) for the property. The result is your total unrecaptured section 1250 gain that must be allocated to the installment payments received from the sale.

Step 3.   Generally, the amount of section 1231 gain on each installment payment is treated as unrecaptured section 1250 gain until the total unrecaptured section 1250 gain figured in step 2 has been used in full. Figure the amount of gain treated as unrecaptured section 1250 gain for installment payments received in 2003 as the smaller of (a) the amount from line 26 or line 37 of your 2003 Form 6252, whichever applies, or (b) the amount of unrecaptured section 1250 gain remaining to be reported. This amount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years (excluding section 1250 ordinary income recapture). However, if you chose not to treat all of the gain from payments received after May 6, 1997, and before August 24, 1999, as unrecaptured section 1250 gain, use only the amount you chose to treat as unrecaptured section 1250 gain for those payments to reduce the total unrecaptured section 1250 gain remaining to be reported for the sale. Include this amount on line 4.

Line 10.   Include on line 10 your share of the partnership's unrecaptured section 1250 gain that would result if the partnership had transferred all of its section 1250 property in a fully taxable transaction immediately before you sold or exchanged your interest in that partnership. If you recognized less than all of the realized gain, the partnership will be treated as having transferred only a proportionate amount of each section 1250 property. For details, see Regulations section 1.1(h)-1. Also attach the statement required under Regulations
section 1.1(h)-1(e).

Line 12.   An example of an amount to include on line 12 is unrecaptured section 1250 gain from the sale of a vacation home you previously used as a rental property but converted to personal use prior to the sale. To figure the amount to enter on line 12, follow the applicable instructions below.

Installment sales.   To figure the amount to include on line 12, follow the steps below for each installment sale of property held more than 1 year for which you did not make an entry in Part I of your Form 4797 for the year of sale.
  • Step 1. Figure the smaller of (a) the depreciation allowed or allowable or (b) the total gain for the sale. This is the smaller of line 22 or line 24 of your 2003 Form 4797 (or the comparable lines of Form 4797 for the year of sale) for the property.
  • Step 2. Reduce the amount figured in step 1 by any section 1250 ordinary income recapture for the sale. This is the amount from line 26g of your 2003 Form 4797 (or the comparable line of Form 4797 for the year of sale) for the property. The result is your total unrecaptured section 1250 gain that must be allocated to the installment payments received from the sale.
  • Step 3. Generally, the amount of capital gain on each installment payment is treated as unrecaptured section 1250 gain until the total unrecaptured section 1250 gain figured in step 2 has been used in full. Figure the amount of gain treated as unrecaptured section 1250 gain for installment payments received in 2003 as the smaller of (a) the amount from line 26 or line 37 of your 2003 Form 6252, whichever applies, or (b) the amount of unrecaptured section 1250 gain remaining to be reported. This amount is generally the total unrecaptured section 1250 gain for the sale reduced by all gain reported in prior years (excluding section 1250 ordinary income recapture). However, if you chose not to treat all of the gain from payments received after May 6, 1997, and before August 24, 1999, as unrecaptured section 1250 gain, use only the amount you chose to treat as unrecaptured section 1250 gain for those payments to reduce the total unrecaptured section 1250 gain remaining to be reported for the sale. Include this amount on line 12.

Other sales or dispositions of section 1250 property.   For each sale of property held more than 1 year (for which you did not make an entry in Part I of Form 4797), figure the smaller of (a) the depreciation allowed or allowable or (b) the total gain for the sale. This is the smaller of line 22 or line 24 of Form 4797 for the property. Next, reduce that amount by any section 1250 ordinary income recapture for the sale. This is the amount from line 26g of Form 4797 for the property. The result is the total unrecaptured section 1250 gain for the sale. Include this amount on line 12.

Unrecaptured Section 1250 Gain Worksheet—Line 19

Keep for your Records
  If you are not reporting a gain on Form 4797, line 7, column (g), skip lines 1 through 9 and go to line 10.  
1. If you have a section 1250 property in Part III of Form 4797 for which you made an entry in Part I of Form 4797 (but not on Form 6252), enter the smaller of line 22 or line 24 of Form 4797 for that property. If you did not have any such property, go to line 4. If you had more than one such property, see instructions 1.      
2. Enter the amount from Form 4797, line 26g, for the property for which you made an entry on line 1 2.      
3. Subtract line 2 from line 1 3.      
4. Enter the total unrecaptured section 1250 gain included on line 26 or line 37 of Form(s) 6252 from installment sales of trade or business property held more than 1 year (see instructions) 4.      
5. Enter the total of any amounts reported to you on a Schedule K-1 from a partnership or an S corporation as “unrecaptured section 1250 gain” 5.      
6. Add lines 3 through 5 6.      
7. Enter the smaller of line 6 or the gain from Form 4797, line 7, column (g) 7.      
8. Enter the amount, if any, from Form 4797, line 8, column (g) 8.      
9. Subtract line 8 from line 7. If zero or less, enter -0- 9.      
10. Enter the amount of any gain from the sale or exchange of an interest in a partnership attributable to unrecaptured section 1250 gain (see instructions) 10.      
11. Enter the total of any amounts reported to you on a Schedule K-1, Form 1099-DIV, or Form 2439 as “unrecaptured section 1250 gain” from an estate, trust, real estate investment trust, or mutual fund (or other regulated investment company) 11.      
12. Enter the total of any unrecaptured section 1250 gain from sales (including installment sales) or other dispositions of section 1250 property held more than 1 year for which you did not make an entry in Part I of Form 4797 for the year of sale (see instructions) 12.      
13. Add lines 9 through 12 13.      
14. If you had any section 1202 gain or collectibles gain or (loss), enter the total of lines 1 through 4 of the 28% Rate Gain Worksheet on page D-8. Otherwise, enter -0- 14.      
15. Enter the (loss), if any, from Schedule D, line 7b. If Schedule D, line 7b, is zero or a gain, enter -0- 15.   ()  
16. Enter your long-term capital loss carryovers from Schedule D, line 14, and Schedule K-1 (Form 1041), line 13c 16.   ()  
17. Combine lines 14 through 16. If the result is a (loss), enter it as a positive amount. If the result is zero or a gain, enter -0- 17.      
18. Unrecaptured section 1250 gain. Subtract line 17 from line 13. If zero or less, enter -0-. Enter the result here and on Schedule D, line 19 18.      
 

Line 20

If you complete Part IV, complete the worksheet below if either of the following apply for 2003.

  • You reported in Part II, column (f), a section 1202 exclusion from the eligible gain on qualified small business stock (see page D-4) or
  • You reported in Part II, column (f), a collectibles gain or (loss). A collectibles gain or (loss) is any long-term gain or deductible long-term loss from the sale or exchange of a collectible that is a capital asset.

Collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible property.

Include on the worksheet any gain (but not loss) from the sale or exchange of an interest in a partnership, S corporation, or trust held for more than 1 year and attributable to unrealized appreciation of collectibles. For details, see Regulations section 1.1(h)-1. Also, attach the statement required under Regulations section 1.1(h)-1(e).

28% Rate Gain Worksheet—Line 20

Keep for your Records
1. Enter the total of all collectibles gain or (loss) from items you reported on line 8, column (f), of Schedules D and D-1 1.    
2. Enter as a positive number the amount of any section 1202 exclusion you reported on line 8, column (f), of Schedules D and D-1 2.    
3. Enter the total of all collectibles gain or (loss) from Form 4684, line 4 (but only if Form 4684, line 15, is more than zero); Form 6252; Form 6781, Part II; and Form 8824 3.    
4. Enter the total of any collectibles gain reported to you on:
  • Form 1099-DIV, box 2f;
  • Form 2439, box 1f; and
  • Schedule K-1 from a partnership, S corporation, estate, or trust.
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   4.    
5. Enter your long-term capital loss carryovers from Schedule D, line 14, and Schedule K-1 (Form 1041), line 13c 5. ()  
6. If Schedule D, line 7b, is a (loss), enter that (loss) here. Otherwise, enter -0- 6. ()  
7. Combine lines 1 through 6. If zero or less, enter -0-. If more than zero, also enter this amount on Schedule D, line 20 7.    
 

Lines 31 and 43

If you are filing Form 4952, Investment Interest Expense Deduction, and the amount on line 4g is greater than the amount on line 4e of that form, use the worksheet below to figure the amount to enter on Schedule D, lines 31 and 43. Otherwise, enter on those lines the sum of lines 17b and 23 of Schedule D (unless you are skipping the line).

Worksheet for Lines 31 and 43

Keep for your Records
1. Enter your qualified dividends from Form 1040, line 9b 1.    
2. Enter the amount from Form 4952, line 4g 2.        
3. Enter the amount from Form 4952, line 4e (or, if applicable, the smaller amount you entered on the dotted line next to line 4e) 3.        
4. Subtract line 3 from line 2. If zero or less, enter -0- 4.    
5. Subtract line 4 from line 1. If zero or less, enter -0- 5.    
6. Enter the amount from Schedule D, line 17b 6.    
7. Add lines 5 and 6. Enter the result here and on Schedule D, lines 31 and 43 (unless you are skipping the line) 7.    
 

Line 35—Qualified 5-Year Gain

Qualified 5-year gain is long-term capital gain (other than 28% rate gain or gain on line 6 or 10 through 12 of the Unrecaptured Section 1250 Gain Worksheet) from property held more than 5 years and sold or otherwise disposed of before
May 6, 2003. Qualified 5-year gain is taxed at 8% to the extent the gain would otherwise be taxed at 10%. To figure your qualified 5-year gain, complete the worksheet on this page if any of the following apply.

  • You held long-term capital gain property for more than 5 years and sold or otherwise disposed of it at a gain before May 6, 2003.
  • You received a Schedule K-1 from an estate, trust, partnership, or S corporation that reports “qualified 5-year gain.”
  • You received a Form 1099-DIV (or Form 2439) with “qualified 5-year gain” reported in box 2c (box 1c of Form 2439).
  • You received payments before
    May 6, 2003, from an installment sale of long-term capital gain property that you had held for more than 5 years when you entered into the installment sale.

Qualified 5-Year Gain Worksheet—Line 35

Keep for your Records
1. Enter the total of all gains that you reported on line 8, column (f), of Schedules D and D-1 from property held more than 5 years and disposed of before May 6, 2003. Do not reduce these gains by any losses 1.    
2. Enter the total of all gains from property held more than 5 years and disposed of before May 6, 2003, from Form 4797, Part I, but only if Form 4797, line 7, column (g), is more than zero. Do not reduce these gains by any losses 2.    
3. Enter the total of all capital gains from property held more than 5 years and disposed of before May 6, 2003, from Form 4684, line 4, but only if Form 4684, line 15, is more than zero. Do not reduce these gains by any losses 3.    
4. Enter the total of all capital gains from property held more than 5 years and disposed of before May 6, 2003, from Form 6252; Form 6781, Part II; and Form 8824. Do not reduce these gains by any losses 4.    
5. Enter the total of any qualified 5-year gain reported to you on:
  • Form 1099-DIV, box 2c;
  • Form 2439, box 1c; and
  • Schedule K-1 from a partnership, S corporation, estate, or trust (do not
    include gains from section 1231 property; take them into account on line 2
    above, but only if Form 4797, line 7, column (g), is more than zero).
Right brace
   5.    
6. Add lines 1 through 5 6.    
7. Enter the part, if any, of the gain on line 6 that is:
  • Attributable to 28% rate gain or
  • Included on line 6, 10, 11, or 12 of the Unrecaptured Section
    1250 Gain Worksheet     on page D-7.
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   7.    
8. Qualified 5-year gain. Subtract line 7 from line 6. Enter the result here and on Schedule D, line 35 8.    
 

Schedule D Tax Worksheet—Line 53

Keep for your Records
Complete this worksheet only if line 19 or line 20 of Schedule D is more than zero.  
1.   Enter your taxable income from Form 1040, line 40 1.      
2.   Enter your qualified dividends from Form 1040, line 9b 2.        
3.   Enter the amount from Form 4952, line 4g 3.        
4.   Enter the amount from Form 4952, line 4e* 4.        
5.   Subtract line 4 from line 3. If zero or less, enter -0- 5.        
6.   Subtract line 5 from line 2. If zero or less, enter -0- 6.        
7.   Enter the smaller of line 16 or line 17a of Schedule D 7.        
8.   Enter the smaller of line 3 or line 4 8.        
9.   Subtract line 8 from line 7. If zero or less, enter -0- 9.        
10.   Add lines 6 and 9 10.        
11.   Add lines 19 and 20 of Schedule D 11.        
12.   Enter the smaller of line 9 or line 11 12.        
13.   Subtract line 12 from line 10. 13.      
14.   Subtract line 13 from line 1. If zero or less, enter -0-. 14.      
15.   Enter the smaller of line 1 or:  
   
  • $56,800 if married filing jointly or qualifying widow(er);
  
   
  • $28,400 if single or married filing separately; or
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   15.        
   
  • $38,050 if head of household.
  
16.   Enter the smaller of line 14 or line 15 16.        
17.   Subtract line 10 from line 1. If zero or less, enter -0- 17.        
18.   Enter the larger of line 16 or line 17 18.        
    If lines 15 and 16 are the same, skip lines 19 through 28 and go to line 29. Otherwise, go to line 19.  
19.   Subtract line 16 from line 15 19.        
20.   Add the amounts on Schedule D, line 17b, and line 6 above 20.        
21.   Enter the smaller of line 19 or line 20 21.        
22.   Multiply line 21 by 5% (.05) 22.      
    If lines 19 and 21 are the same, skip lines 23 through 28 and go to line 29. Otherwise, go to line 23.  
23.   Subtract line 21 from line 19 23.        
24.   Qualified 5-year gain from the worksheet on page D-10. Also enter on  
    Schedule D, line 35 24.        
25.   Enter the smaller of line 23 or line 24 25.        
26.   Multiply line 25 by 8% (.08) 26.      
27.   Subtract line 25 from line 23 27.        
28.   Multiply line 27 by 10% (.10) 28.      
    If lines 1 and 15 are the same, skip lines 29 through 47 and go to line 48. Otherwise, go to line 29.  
29.   Enter the smaller of line 1 or line 13 29.        
30.   Enter the amount from line 19 (if line 19 is blank, enter -0-) 30.        
31.   Subtract line 30 from line 29. If zero or less, enter -0- 31.        
32.   Add the amounts on Schedule D, line 17b, and line 6 above 32.        
33.   Enter the amount from line 21 (if line 21 is blank, enter -0-) 33.        
34.   Subtract line 33 from line 32 34.        
35.   Enter the smaller of line 31 or line 34 35.        
36.   Multiply line 35 by 15% (.15) 36.      
37.   Subtract line 35 from line 31 37.        
38.   Multiply line 37 by 20% (.20) 38.      
    If Schedule D, line 19, is zero or blank, skip lines 39 through 44 and go to line 45. Otherwise, go to line 39.  
39.   Enter the smaller of line 9 above or Schedule D, line 19 39.        
40.   Add lines 10 and 18 40.        
41.   Enter the amount from line 1 above 41.        
42.   Subtract line 41 from line 40. If zero or less, enter -0- 42.        
43.   Subtract line 42 from line 39. If zero or less, enter -0- 43.        
44.   Multiply line 43 by 25% (.25) 44.      
    If Schedule D, line 20, is zero or blank, skip lines 45 through 47 and go to line 48. Otherwise, go to line 45.  
45.   Add lines 18, 19, 31, and 43 45.        
46.   Subtract line 45 from line 1 46.        
47.   Multiply line 46 by 28% (.28) 47.      
48.   Figure the tax on the amount on line 18. Use the Tax Table or Tax Rate Schedules, whichever applies 48.      
49.   Add lines 22, 26, 28, 36, 38, 44, 47, and 48 49.      
50.   Figure the tax on the amount on line 1. Use the Tax Table or Tax Rate Schedules, whichever applies 50.      
51.   Tax on all taxable income (including capital gains and qualified dividends). Enter the smaller of line 49 or line 50. Also enter this amount on Schedule D, line 53, and Form 1040, line 41 51.      
             
    *If applicable, enter instead the smaller amount you entered on the dotted line next to line 4e of Form 4952.        

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