Investor with dividends and stock sales
A single professional with a W-2 plus a brokerage account: qualified and ordinary dividends, and both short- and long-term stock sales. Schedule B, Schedule D, and the capital-gains rates.
Taxpayer facts
Who this is and what their year looked like.
Naomi is single and works as a software engineer in Bellevue. Alongside her salary, she invests through a taxable brokerage account.
In 2025 she received dividends and sold a few stock positions, some held long term and one short term. She takes the standard deduction.
- NameNaomi K. Sato
- Date of birth07/19/1991
- SSN534-70-1128
- Age (as of 12/31/2025)34
- Filing statusSingle
- DependentsNone
- OccupationSoftware engineer
- Address10600 NE 8th St, Apt 1802, Bellevue, WA 98004
- ResidencyWashington, full year (no state income tax)
Source documents
Work from these the way you would a real client's paperwork. Everything is fictional.
Objectives
What a correct return should capture.
- File as Single, and report the wages.
- Report the ordinary dividends and the qualified dividends. Because total dividends exceed $1,500, complete Schedule B.
- Report the interest.
- Report the stock sales on Schedule D: the long-term gain and the short-term gain, then net them. Because basis was reported to the IRS on every sale and there are no adjustments, the totals go straight on Schedule D lines 1a and 8a and no Form 8949 is needed.
- Recognize that the qualified dividends and the net long-term gain are taxed at the preferential capital-gains rates, while the short-term gain is taxed as ordinary income.
- Use the Qualified Dividends and Capital Gain Tax Worksheet: compare taxable income to the 2025 single 0% ceiling ($48,350) to find the rate on the preferential amount (qualified dividends plus net long-term gain), and tax the rest at ordinary rates.
- Reconcile withholding to the refund or balance due.
- Note that Washington has no state income tax.
Check your work
The answer key and the complete return, the way a real client receives it: the 1040 and its schedules, the workpapers behind every number, and the signature forms.
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