IRS Form 1099-B: Complete Guide to Investment Sales Reporting

Important: Form 1099-B reports proceeds from securities sales and barter transactions. You must report all sales, even if you don't receive a 1099-B.

Understanding Your 1099-B

This form documents investment sales and barter exchange transactions.

Key Sections Explained:

  • Box 1a: Description of property sold
  • Box 1b: Date acquired
  • Box 1c: Date sold
  • Box 1d: Proceeds from sale
  • Box 1e: Cost basis (if reported to IRS)
  • Box 1f: Accrued market discount
  • Box 6: Federal income tax withheld
Who Receives This Form?

You'll receive Form 1099-B if you:

  • Sold stocks, bonds, or mutual funds through a broker
  • Traded cryptocurrency on an exchange
  • Participated in barter exchanges ($600+ value)
  • Exercised stock options
  • Received substitute payments in lieu of dividends
  • Had debt instruments canceled or sold
Tax Treatment of Investment Sales

Capital Gains Rules: Holding period determines tax rate.

  • Short-term (≤1 year): Taxed as ordinary income (10%-37%)
  • Long-term (>1 year): Eligible for lower rates (0%, 15%, or 20%)
  • Wash Sales: Losses disallowed if repurchased within 30 days
  • Barter Income: Taxable as ordinary income at fair market value
  • Crypto Transactions: Each trade is a taxable event
Step-by-Step Reporting Process
  1. Match all 1099-B forms to your transaction records
  2. Determine cost basis:
    • Use broker-reported basis if available
    • Calculate manually for uncovered securities
    • Include commissions and fees
  3. Complete Form 8949:
    • Separate short-term and long-term transactions
    • Note wash sales and other adjustments
  4. Transfer totals to Schedule D
  5. Report on Form 1040 (Line 7 for capital gains)
Special Considerations
  • Cryptocurrency: Each trade creates a taxable event
  • Inherited Securities: Step-up in basis to date-of-death value
  • Gifted Securities: Carry over donor's basis and holding period
  • DRIP Sales: Must track each reinvestment's basis
  • Corporate Actions: Mergers, splits require basis adjustments
Essential Recordkeeping

Maintain these records for 3+ years after filing:

  • All 1099-B forms and brokerage statements
  • Purchase confirmations and cost basis documentation
  • Records of wash sales and corporate actions
  • Barter exchange records and valuations
  • Crypto transaction history (date, amount, value)

Need Help With Investment Sales Reporting?

Our tax professionals specialize in complex capital gains reporting.

We Can Help With:

  • Accurate cost basis calculations
  • Wash sale analysis
  • Crypto tax reporting
  • Tax-loss harvesting strategies
  • Barter income reporting

Call 972-519-0041 today for expert investment tax guidance

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