U.S. · Form 8995 line 12
Form 8995 line 12 net capital gain plus qualified dividends.
What to enter on line 12 for Form 1040 filers with and without Schedule D, and for other returns.
Line 12 is your net capital gain, if any, increased by qualified dividends. On Form 1040, 1040-SR or 1040-NR it is line 3a plus your net capital gain: line 7a if you do not file Schedule D, or the smaller of Schedule D line 15 or 16 if you do, adding nothing if either is zero or less. Line 13 then subtracts line 12 from line 11, and line 14 is 20% of that.
Compute line 12 (Form 1040 filers)
Result
Line 12 by return
| Return | What to enter on line 12 (2025 instructions) |
|---|---|
| Form 1040, 1040-SR or 1040-NR, no Schedule D | Line 3a plus Form 1040 line 7a (your net capital gain). |
| Form 1040, 1040-SR or 1040-NR, with Schedule D | Line 3a plus the smaller of Schedule D line 15 or 16, unless line 15 or 16 is zero or less, in which case nothing is added to the qualified dividends. |
| Form 1041 | Line 2b(2) plus net capital gain; with Schedule D (Form 1041), the smaller of line 18a(2) or 19(2), unless either is zero or less. |
| Form 1041-N | Line 2b plus the smaller of Schedule D line 10 or 11, unless either is zero or less. |
| Form 990-T trusts | Schedule D (Form 1041), the smaller of line 18a(2) or 19(2), unless either is zero or less, in which case net capital gain is zero. |
| S-corporation portion of an ESBT | ESBT Tax Worksheet line 2b plus the smaller of Schedule D (Form 1041) line 18a(2) or 19(2), with nothing added if either is zero or less. |
Why line 12 matters
The deduction cannot exceed 20% of taxable income after removing net capital gain and qualified dividends. Line 11 is taxable income before the QBI deduction. Line 13 is line 11 minus line 12, not below zero. Line 14 is line 13 times 20%, and line 15, the QBI deduction, is the smaller of line 10 and line 14. A larger line 12 can therefore lower the income limitation.
Worked example
A filer with $3,000 of qualified dividends and no Schedule D reports $12,000 on Form 1040 line 7a, so line 12 is $15,000. A filer who does file Schedule D with line 15 of $9,000 and line 16 of $11,000 adds the smaller, $9,000, to $3,000 for a line 12 of $12,000; if either Schedule D line were zero or a loss, only the $3,000 would count. Amounts are illustrative.
What this page does not do
It does not determine QBI or whether Form 8995 is the right form. For a full QBI estimate see the QBI deduction calculator, and for the dividend and gain tax worksheet the qualified dividends worksheet.
Sources
- Instructions for Form 8995 (2025): Line 12 source lines by return and the line 13 to 15 sequence. Read November 2, 2026.
- Form 8995 (2025): The exact wording of lines 10 to 15. Read November 2, 2026.
These are the tax year 2025 edition instructions and forms (published for returns filed in 2026). The IRS revises them each year, so thresholds, line numbers and limits can change; check the current edition before relying on a figure.
Frequently asked questions
What goes on Form 8995 line 12?
Your net capital gain, if any, increased by any qualified dividends, using the amounts from your tax return as the instructions describe.
What is line 12 for a Form 1040 filer without Schedule D?
Form 1040 line 3a (qualified dividends) plus line 7a (net capital gain).
What if I file Schedule D?
Add the smaller of Schedule D line 15 or 16 to line 3a. If line 15 or 16 is zero or less, nothing is added to the qualified dividends.
How does line 12 affect the QBI deduction?
Line 13 is line 11 minus line 12, and line 14 is 20% of line 13. The deduction on line 15 is the smaller of line 10 or line 14.
Do estates and trusts use the same line?
Yes, with different source lines: Form 1041 line 2b(2) plus net capital gain, as the instructions detail.
Not tax or legal advice
This page summarizes IRS instructions and is not tax, legal or financial advice. A CPA, enrolled agent or the IRS can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.