Schedule D education sought

[Treasur2]

A relative newcomer to tax prep.

Why (your opinion) does Schedule D ask for the separation of "covered" securities regarding reporting. Or why is there requirement to break this out on 1099 by issuers by IRS?

I've actually looked up what a "Covered" security is on Investopedia. Still perplexed why this would be required to be broken out.

I'm guessing, it enables some kind of database at IRS to track future audits regarding Schedule D and if the root cause is traceable more\less to covered vs. non-covered.

But your opinions or technical knowledge sought.

[TAXNJ]

Consider other source reference and .....

See TTB tab 6-7 and IRS web-site should provide answers.

[Rapid Robert]

I'm guessing, it enables some kind of database at IRS to track future audits regarding Schedule D and if the root cause is traceable more\less to covered vs. non-covered.

Good guess.