Do I need to report long term capital gains below the reporting limit when filing taxes?

While there's a common misconception about a "reporting limit" for capital gains, the reality is a bit different. ALL capital gains technically need to be reported on your tax return, regardless of the amount. The confusion might be coming from the fact that long-term capital gains are taxed at 0% if your total taxable income (including the capital gains) falls below certain thresholds ($44,625 for single filers in 2023). But this doesn't mean you don't have to report them - it just means you won't owe taxes on them. Your brokerage should have sent you a Form 1099-B showing your stock sales. The IRS receives a copy too, so they'll know about these transactions. If you otherwise need to file a tax return (due to other income), you should definitely include these capital gains on Schedule D and Form 8949.

I had this exact same problem last year! After spending hours researching, I finally found this awesome tool that made figuring out my capital gains situation super easy - https://taxr.ai I was also confused about what needed to be reported since I only made like $800 from selling some stocks I'd had for years. The site analyzed my investment documents and clearly explained exactly what I needed to report. Apparently, you DO need to report all capital gains, but if your income is below certain thresholds you might not owe any taxes on them. What was really helpful was that it explained the different between the reporting requirement vs the tax rate. Totally cleared up my confusion about when the 0% tax rate applies versus when I need to actually show the transactions on my return.

Just wanted to follow up - I tried https://taxr.ai after posting my question and wow, it actually worked really well for my situation! I uploaded my 1099-B forms plus my crypto transaction history, and it immediately identified all my long-term vs short-term gains. It confirmed what others here said - that I DO need to report all capital gains regardless of amount, but calculated that I qualified for the 0% tax rate on my long-term gains. The best part was that it generated all the right forms I needed to file (Schedule D and Form 8949) with everything filled out correctly. Saved me so much time and confusion! Definitely using this again next year when tax season rolls around.

If you're still having trouble getting a clear answer from the IRS website or can't get through to them on the phone (which let's be honest, is almost always the case), I'd recommend trying Claimyr - https://claimyr.com. They have this service that gets you connected to an actual IRS agent without the hours-long wait. I was in a similar situation last year with some capital gains questions and was going crazy trying to get through the IRS phone line. Tried Claimyr as a last resort, and they got me through to an IRS agent in about 20 minutes. The agent confirmed I needed to report all my capital gains even though they were small amounts. You can see how it works here: https://youtu.be/_kiP6q8DX5c It's so frustrating that the IRS makes something this basic so difficult to understand!

I need to publicly eat my words here. After my skeptical comment, I actually tried Claimyr (https://claimyr.com) because I was desperate to confirm some details about reporting my capital gains. I'm shocked to say it actually worked exactly as advertised. I got a call back in about 35 minutes with an actual IRS agent on the line. The agent confirmed that yes, you have to report ALL capital gains regardless of amount, but also explained how the 0% tax bracket works for long-term gains. Saved me hours of research and wondering if I was doing the right thing. Never thought I'd say this about anything tax-related, but this was actually worth every penny.

Here's the simple answer: Yes, you need to report ALL capital gains, no matter how small. There is no "reporting limit" for capital gains like there is for filing a tax return based on income. The confusion is because: 1) You might not owe any TAXES on those gains if your income is low enough to be in the 0% capital gains bracket 2) You might not need to FILE A TAX RETURN at all if your total income is below the standard deduction But if you do need to file a return for other reasons, then yes, report those capital gains even if they're tiny. The IRS gets copies of your 1099-B and will notice if they're missing.

Lol @ all the complicated answers here. The simple fact is the IRS knows about your gains bcuz your broker reports them. So if you make enough to file a return anyway, just include them. If you don't make enough to file a return, don't worry about it. And FYI - the IRS isnt coming after anyone for a few hundred bucks in unreported gains. They're after the big fish with millions in hidden income, not regular folks with tiny stock sales.

Adding to what others have said - the key thing to remember is that the IRS has automated matching systems. When your broker sends them a 1099-B showing your stock sales, their computers automatically check to see if those transactions appear on your tax return. Even for small amounts like your sub-$1000 gain, if there's a mismatch, you'll likely get a CP2000 notice in the mail asking you to explain the discrepancy. This creates unnecessary paperwork and stress, even if you don't end up owing any additional tax. Since you mentioned these are long-term gains and you're likely in a lower income bracket, you're probably right that they'll be taxed at 0%. But reporting them is still required and honestly pretty straightforward once you have your 1099-B form. Just fill out Schedule D and Form 8949 - it's a few extra lines but saves you potential headaches later. Better to spend 15 minutes reporting them correctly now than dealing with IRS correspondence later!