Form 8949 for Non-Traded REIT and BDC Share Sales: 2026 Guide

Which box: the 1099-B decides, and most of these shares are covered

Form 8949 has one box per kind of statement. The instructions for the 2025 form (the 2026 edition was not posted when we checked on October 15, 2026; the draft file we downloaded is still marked 2025) split transactions this way:

Two things change the picture for a non-traded holder.

First, many of these vehicles do send a 1099-B with basis. A corporation that regularly buys back its own stock is a broker: 26 CFR 1.6045-1(a)(1) says a broker includes “a corporation that regularly redeems its own stock”, and (a)(9) counts redemptions for cash as sales. BREIT's April 2026 post-effective amendment says “IRS regulations require us to determine and disclose on Form 1099-B the adjusted cost basis for shares of our stock sold or repurchased,” and that, unless you elect otherwise, it uses first-in-first-out. JLL Income Property Trust and RREEF Property Trust use almost the same sentence in their April 2026 prospectuses. JLL adds that reporting applies to “dispositions of REIT shares acquired after 2010”, with 2011 for shares acquired through a reinvestment plan. If your shares sit in a brokerage account, the custodian files the 1099-B instead.

Second, basis is “not reported” in specific cases. The Instructions for Form 1099-B (2026) define a covered security as, among other things, “Stock acquired for cash in an account after 2010”; the regulation, 26 CFR 1.6045-1(a)(15), adds a 2012 date for stock eligible for the average basis method, and lists exceptions such as stock acquired in 2011 and moved into a dividend reinvestment plan in 2011. Anything not covered, such as shares bought in the older vehicles before 2011, gets box B or E, and you enter the basis you can document in column (e). Shares in an IRA are different: the regulation's example concludes that “Because the account is not taxable, sales in the account are not subject to reporting under this section,” so for those, no Form 8949 (our reading; the IRA's own tax rules are in our guide to illiquid assets in an IRA).

The reason to care about the box is Exception 1. The Schedule D instructions let you skip Form 8949 and enter the totals on line 8a only when the 1099-B shows basis reported to the IRS and you have no adjustment to make. If you need to adjust basis for anything the 1099-B missed, you cannot use it and the sale goes on Form 8949.

Return of capital comes off basis before you subtract anything

The rule is in the Code and repeated in the form instructions. 26 U.S.C. 301(c)(2) reduces basis by the non-dividend part of a distribution, 301(c)(3)(A) treats any excess over basis as “gain from the sale or exchange of property,” and 26 U.S.C. 1016(a)(4) lists, as an adjustment to basis, distributions that “were tax-free or were applicable in reduction of basis” (the brief for this page cited 1016(a)(5); that paragraph is about bonds). The Instructions for Form 8949 (2025) tell you to “adjust your basis in each share, but not below zero, by subtracting all the nondividend distributions allocable to such shares that were received before the sale.” Publication 550 (2025) adds how to allocate when you bought in lots: “reduce the basis of your earliest purchases first.” Our return-of-capital census shows how much of 2025's payouts 38 vehicles called return of capital; the question here is what that does to your sale.

The vehicles' own numbers

BREIT states the tax character of its distributions in each Form 10-K, on distributions paid in the calendar year. A December declaration that is paid in January belongs to the next tax year, a timing detail we ignore below.

The capital gain share is not basis: it is a capital gain distribution that goes on Schedule D, line 13, from box 2a of the 1099-DIV, whatever your holding period (Instructions for Schedule D, 2025).

A second vehicle shows the other extreme. KKR Real Estate Select Trust, which elected to be taxed as a REIT and buys back shares through quarterly tender offers, reported return of capital of $78,862,866 for 2025, or $1.56 per Class I share in both 2025 and 2024 (taxed as return of capital in both), against a December 31, 2025 NAV of $23.45 (Form N-CSR). A Class I holder through both years had $3.12 of basis returned (our arithmetic), 13.3% of that NAV (our arithmetic). JLL Income Property Trust sits at the low end among the REITs we read: its January 29, 2026 press release put about 18% of 2025 distributions in box 3, with about 82% long-term capital gain.

Worked example: purchase, five years of distributions, one repurchase

We build one holder from the filings, in round shares, with the amounts labelled as assumptions. This is an illustration with a real vehicle's numbers, not what any particular holder owes.

• Purchase (assumption): 1,000 BREIT Class I shares at $11.5547, the Class I NAV on December 31, 2020, for a cost basis of $11,554.70. Cash distributions, no reinvestment.
• Each year, return of capital per share (our arithmetic): declared per share times the year's percentage. We use the declared amount as a stand-in for the amount paid.
• Sale (assumption): all 1,000 shares repurchased in 2026 at $14.5256, the Class I NAV in BREIT's June 30, 2026 Form 10-Q. The actual price depends on the NAV in force on the repurchase date.

Adjusted basis is $11,554.70 less $3,090.69, or $8,464.01 (our arithmetic). Proceeds are $14,525.60. The gain is $6,061.59, and because the shares were held more than a year it is long term under 26 U.S.C. 1222. Had you used the $11,554.70 you paid, you would have computed $2,970.90 and understated the gain by the $3,090.69 of return of capital (our arithmetic). The ordinary and capital gain shares of those years (for example 4.73% and 3.36% in 2021) were reported on the 1099-DIV in their own years and do not touch basis.

Form 8949 allows whole dollars (round $0.50 and up). The row in Part II, columns (a) to (h), reads two ways:

The second row follows Example 4 in the Form 8949 instructions: when the reported basis is higher than the correct basis, enter the reported basis in column (e), the correct figure on the worksheet, and the difference as a positive number in column (g). The totals flow to Schedule D line 8b (box D) or line 9 (box E). The fine print behind the second row is 26 CFR 1.6045-1(d)(6): “A broker is not required to consider transactions or events occurring outside the account except for an organizational action taken by an issuer,” and the issuer's organizational actions arrive through a Form 8937 statement. The Form 8937 instructions say an issuer must file it for a nontaxable cash distribution and give holders a statement by January 15; whether your custodian received one for each year is a question for your custodian.

Reinvested distributions and lots

If your distributions were reinvested, every reinvestment is a new lot. The tax rule is the same as for cash: JLL's prospectus says that if you participate in its plan “you will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital.” Three consequences for the sale row (our reading):

1. The new lot's basis is the amount reinvested. BREIT's 10-K says 50% of 2025 distributions were reinvested ($1.18 billion of $2.37 billion), so a reinvesting holder has dozens of lots a year.
2. Holding period is lot by lot. Under 26 U.S.C. 1222 and the Form 8949 instructions, you count from the day after each lot was acquired, so a repurchase that includes 2026 reinvestments produces a short-term row for those lots and a long-term row for the older ones, on two different parts of the form.
3. Which lots go first depends on the method. BREIT, JLL and RREEF default to first-in-first-out unless you elect otherwise, and JLL notes that tax lots of both held and available shares are used. For RIC shares and DRIP shares left with a custodian, 26 CFR 1.1012-1(e) permits an average basis method, in which case one blended basis applies.

KREST's tender offer adds one more mechanical point: if you tender your shares in full, “your participation in the DRIP will be automatically terminated” at the expiration date. A full tender ends the lot-creating stream; a partial one does not.

A tender or repurchase is a sale only if Section 302 says so

A corporate buyback is not automatically a sale. 26 U.S.C. 302(a) treats a redemption as an exchange if one of the tests in 302(b) is met, including that it is “not essentially equivalent to a dividend,” and the funds say so in their documents:

• Blue Owl Credit Income Corp (offer to purchase, filed August 26, 2026, expiring September 30, 2026, for up to 101,609,217 shares): a sale is treated as a sale or exchange if it results in a complete termination, is substantially disproportionate, or is not essentially equivalent to a dividend. If none is met, the amount is taxable as a dividend to the extent of earnings and profits, the excess is return of capital to the extent of basis, and “the tax basis in the Shares tendered to the Company will be transferred to any remaining Shares held by such shareholder.”
• KKR Real Estate Select Trust (offer to purchase dated September 17, 2026, up to 3,116,841 shares, expiring October 16, 2026): the same three tests, the same dividend result, and a statement that the other holders could be deemed to receive distributions.
• BREIT's prospectus says a repurchase that fails the tests is a “dividend equivalent repurchase” taxed like a regular distribution, and JLL Income Property Trust says it “will decline to effect a repurchase to the extent that we believe that it would constitute a dividend equivalent repurchase.”

For a small holder in a large fund the usual result is a sale (OCIC's document says the IRS has treated a relatively minor reduction by a holder with minimal interest as not essentially equivalent to a dividend), but a dividend result has no loss and no Form 8949 row, only 1099-DIV income; the one case where it matters most is a partial tender by a large holder or by a holder who owns related shares (constructive ownership, Section 318). That is a question for the preparer, as our year-end tax calendar says. The fund's tender documents and our tender-offer fund explainer cover mechanics.

Proration

When a fund fills part of the requests, only the filled shares are sold. BREIT's 2023 Form 10-K says that in October, November and December 2023 it fulfilled “56 %, 67 % and 53 % of repurchase requests, respectively.” For a December 2023 request of 1,000 shares that is 530 shares sold (our arithmetic); the other 470 stay on your books with their basis, still reduced by every return-of-capital distribution to date. KREST's offer says an oversubscribed offer is bought pro rata, with priority for death or disability, and OCIC's reserves pro rata purchase. In every case the 8949 row covers the shares actually bought, with the date the fund bought them in column (c); we did not find a rule in the saved sources that fixes the tax date of a tender, so use the date on your confirmation or 1099-B and ask the preparer (not verified beyond that).

Losses: wash sale code W, the six-month rule and the $3,000 cap

A repurchase below basis is a capital loss, with three special rules.

• Wash sale. 26 U.S.C. 1091(a) disallows the loss if, within 30 days before or after the sale, you acquired substantially identical stock. OCIC's tender document applies it: “recognition of a loss on Shares sold pursuant to the Offer ordinarily will be disallowed to the extent a shareholder acquires substantially identical Shares within 30 days before or after the date the Shares are purchased by the Company pursuant to the Offer.” On Form 8949 you enter the sale as usual, code W in column (f), and the disallowed loss as a positive number in column (g); the 1099-B box 1g amount covers only wash sales in the same account. A reinvested distribution on a monthly schedule is a purchase inside the window (our reading; see the year-end calendar).
• Six months or less. If you held the shares six months or less and received a capital gain dividend, 26 U.S.C. 857(b)(8) (REITs) and 852(b)(4) (regulated investment companies) turn the loss into a long-term loss to that extent. OCIC's document repeats it for its shares.
• The cap. The Schedule D instructions allow capital losses up to capital gains plus $3,000 ($1,500 if married filing separately); the rest carries forward. Our tax-loss harvesting page works the crowdfunding side.

What a holder can do with this

• Before the sale, list every purchase, reinvestment and 1099-DIV box 3 for the position, lot by lot, and subtract each year's box 3 from the earliest lots first (Publication 550).
• When the 1099-B arrives, which brokers owe by February 16, 2027 (Publication 1099 says February 15, and February 15, 2027 is Washington's Birthday, our arithmetic), compare its box 1e basis to your ledger. If it is higher, use code B; if it is blank or box 12 is unchecked, use box B or E. Our 1099 due-date page has the dates, and the K-1 comparison covers vehicles that issue a K-1 instead, which are not reported this way.
• Ask the transfer agent or custodian which lot method it used and whether it received each year's Form 8937 statement.
• For a December 31, 2026 sale, ask the fund the repurchase date it will report, and check the 61-day wash sale window for any reinvestments.

What to ask your CPA: Is my tender a sale under Section 302, given my total ownership? Is my 1099-B basis net of return of capital? Which lot method applies? Do any reinvested lots turn this into a short-term row? Does my loss survive the wash sale window?

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on October 15, 2026: Instructions for Form 8949 (2025), Instructions for Schedule D (Form 1040) (2025), Form 8949 (2025), Instructions for Form 1099-B (2026) and its 2027 draft, Publication 1099 (for 2026 returns), Publication 550 (2025) and Instructions for Form 8937 from irs.gov; 26 U.S.C. 301, 302, 316, 852, 857, 1012, 1016, 1091, 1222, 1223, 6045 and 5 U.S.C. 6103 from law.cornell.edu; 26 CFR 1.6045-1 and 1.1012-1 from the eCFR; SEC EDGAR filings: Blackstone Real Estate Income Trust Form 10-K for 2021 (0001662972-22-000027), 2022 (0001662972-23-000030), 2023 (0001662972-24-000036) and 2025 (0001662972-26-000032), Form 10-Q for June 30, 2026 (0001662972-26-000111) and post-effective amendment of April 3, 2026 (0001628280-26-023637); JLL Income Property Trust post-effective amendment (0001628280-26-025755) and Form 8-K (0001314152-26-000012); RREEF Property Trust post-effective amendment (0001542447-26-000043); KKR Real Estate Select Trust Form N-CSR for 2025 (0001193125-26-086188) and Schedule TO offer to purchase of September 17, 2026 (0001193125-26-394262); Blue Owl Credit Income Corp. Schedule TO offer to purchase of August 26, 2026 (0001628280-26-059106). Sums, per-share products, the adjusted basis, gains and the proration example are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.