1099-B
An IRS information return that brokers and barter exchanges issue to report proceeds from securities sales, including the cost basis and holding period for covered securities, used by investors to prepare Form 8949 and Schedule D.
Form 1099-B ('Proceeds from Broker and Barter Exchange Transactions') is the cornerstone document for reporting capital gains and losses on your federal tax return. Brokers are required to send this form — and a copy to the IRS — by February 15 following the tax year in which transactions occurred. For investors with active accounts, a consolidated 1099 statement typically bundles the 1099-B with 1099-DIV and 1099-INT information into a single multi-page document.
Each reportable transaction on the 1099-B includes the description of the security, the date acquired, the date sold, the gross proceeds (box 1d), the cost basis (box 1e, for covered securities), whether the gain or loss is short-term or long-term (box 2), and any adjustments such as wash sale disallowances (box 1g). The 'covered' versus 'noncovered' distinction matters because brokers are only required to report basis for covered securities — stocks acquired after January 1, 2011; mutual fund shares acquired after January 1, 2012; and most fixed-income securities and options acquired after January 1, 2014.
For noncovered securities, the basis field is blank on the 1099-B. The investor must supply the correct basis from personal records. Using an incorrect or assumed basis on Form 8949 without supporting records creates audit risk and could result in overpayment or underpayment of taxes.
Investors should review their 1099-B carefully before filing. Brokers may report incorrect basis for several reasons: corporate actions that adjusted share prices (like splits or mergers) may not always be reflected; DRIP reinvestments in older taxable accounts may not have been tracked from the start; and wash sale calculations may be incomplete if the wash sale involved accounts at different brokers.
Any corrections to broker-reported data must be entered in column (g) of Form 8949 with the appropriate adjustment code, and box 'B' is checked in the transaction's categorization to indicate the basis was incorrect as reported. Retaining brokerage confirmations and year-end statements for at least three years (ideally longer for positions not yet sold) provides the documentation needed to support any adjustments.