1099B Equals Messy Tax Season Ahead Our CPA’s foresees a messy tax season with new cost-basis reporting requirements in effect for the 2011 tax year. Our Miami Accounting Service is warning investment CPA’s to brace for a hectic tax season and prepare for a flood of questions from clients who for the first time will receive a revised …
Form 1099-B: Proceeds from Broker and Barter Exchange form used by brokerages and barter exchanges to record customers’ gains and losses during a tax year
1099-B is the form your broker sends you to document the gains and losses from your investments for the year. According to 1099 B recording requirements, you are supposed to report the income stated on the 1099-B and attach it to your tax return.
Why is there no cost basis on my Form 1099-B? If the cost basis amount reported on the form does not match your adjusted cost basis per your records, you will include adjustment code B on your tax return. Compensation income reported on Form W-2 most likely is not included in your cost basis on Form 1099-B and will require an adjustment amount using code B.
Form 1099-B is different than Form 1099-DIV which reports dividends paid to you during the year. A 1099–B reports the sales proceeds (and now the cost you paid) for securities sold in the year.
Who Must File Form 1099 B? Brokers must submit a 1099-B form to the IRS as well as sending a copy directly to every customer who sold stocks, options, commodities, or other securities during the tax year. The IRS requires submission of the form to serve as a record of a taxpayer’s gains or losses.
You — the taxpayer — are responsible for reporting your cost-basis information accurately to the IRS. You do this in most cases by filling out Form 8949. (For tax history junkies, this form replaced the Form 1040 Schedule D-1 in the tax year 2011 for most cost-basis reporting