An Overview of Form 1099-B

Broker talks to clients to close a deal

What is a 1099-B? 

Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, reports important information about investment security sales. This includes: 

  • Date of the purchase 
  • Date of the sale 
  • Description of the item sold 
  • Total proceeds 
  • If your broker withheld any federal tax 

If the cost basis is known, it will also be reported on this form. Capital gains can affect how much tax you owe, so it is important to account for this form on your return. 

Who files Form 1099-B? 

Brokers and barter exchanges must file this form for individual taxpayers.  

Who needs to report Form 1099-B? 

A broker or barter exchange is required to file this form for the following groups: 

  • Anyone who the broker sold stocks, commodities, mutual funds, or contracts on behalf of for cash 
  • Anyone who received stock, cash, or property from someone affiliated with the broker 
  • A person who used a barter exchange for property or services 

Where do I report the information from Form 1099 B on my tax return? 

If you receive Form 1099-B, first record any relevant information on Form 8949, Sales and Other Dispositions of Capital Assets, to calculate your capital gains or losses. Then transfer than information to Schedule D, Capital Gains, and Losses. This will give you your final adjusted gains or losses. Attach this schedule to your Form 1040. 

What are short-term and long-term gains? 

Box 2 on Form 1099-B will tell you whether your sale is a short-term or long-term gain. If you owned an item for less than a year before selling it, the gain is short-term. Otherwise, the gain is long-term. This is important because the taxes on long-term gains are lower than those on short-term gains. 

Are there special rules for barter exchanges? 

Yes. Usually, when Form 1099-B is reporting a barter exchange, Box 13 will be filled out to report the fair market value of any goods or services exchange in the transaction. This amount is considered income and therefore is taxable. 

What happens if I forget to report Form 1099-B on my tax return? 

If you forget to report the gains or losses from Form 1099-B, you will need to file an amended return using Form 1040X. 

 

For more information about specific tax forms, visit TaxSlayer’s Knowledgebase.