This form is used to report details of your capital asset transactions. A capital asset can be almost anything you own for personal or investment use, such as stocks, bonds, jewelry, coin collections, and real estate.
Part I - Short-Term Transactions: Capital assets you held for 1 year or less. So, if you bought and sold a stock within a single year, it would go here.
Part II - Long-Term Transactions: Capital assets you held for more than 1 year. If you sold your house after living in it for several years, it would go here.
The information then carries over to Schedule D of your Form 1040, impacting your total tax liability.