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What Is Form 1099-B?
Form 1099-B (Proceeds From Broker and Barter Exchange Transactions) is an IRS information return that reports sales of securities, stocks, bonds, commodities, and other investment transactions. Brokers and barter exchanges must issue this form to document realized gains or losses from trades during the tax year.
Who Receives Form 1099-B?
You'll receive a 1099-B if you:
• Sold stocks, bonds, or other securities through a broker
• Made trades in commodities
• Engaged in barter exchange transactions
• Received proceeds from a broker due to mergers or acquisitions
Brokers must issue Form 1099-B for any customer who had proceeds from transactions during the year, regardless of the amount.
Key Deadlines and Requirements
• Brokers must send Form 1099-B to customers by January 31
• Brokers must file copies with the IRS by February 28 (paper) or March 31 (electronic)
• There is no minimum dollar threshold for reporting - all transactions must be reported
• Multiple forms may be issued if you have accounts with different brokers
Information Included on Form 1099-B
The form includes several critical pieces of information:
• Description of property sold (like stock names and symbols)
• Date acquired and date sold
• Sales proceeds
• Cost basis (your original investment amount)
• Whether gain or loss is short-term or long-term
• Federal income tax withheld, if any
• Whether the basis was reported to the IRS
How to Handle Form 1099-B When Filing Taxes
Step 1: Gather Your Documents
Collect all 1099-B forms and your trading records for the year. Compare them to ensure accuracy.
Step 2: Transfer to Schedule D
Report each transaction on Schedule D (Capital Gains and Losses):
• Short-term transactions (held one year or less) go in Part I
• Long-term transactions (held more than one year) go in Part II
Step 3: Complete Form 8949
Use Form 8949 to provide detailed information about each transaction:
• Check box A, B, or C for short-term sales
• Check box D, E, or F for long-term sales
• List each transaction separately with dates, proceeds, and basis
Step 4: Calculate Totals
Sum up your gains and losses, then transfer the totals to Schedule D and Form 1040.
Common Mistakes to Avoid
• Failing to report all transactions: Even small trades must be reported
• Missing wash sales: Be aware of the 30-day rule when repurchasing similar securities
• Incorrect basis reporting: Double-check your purchase price and any adjustments
• Wrong holding period: Carefully count the days between purchase and sale
• Forgetting to include reinvested dividends in your cost basis
• Not reporting cryptocurrency transactions that appear on 1099-B
Consequences of Incorrect Filing
Underreporting Income
• The IRS may send a CP2000 notice proposing additional taxes
• Interest charges from the due date of the return
• Potential penalties of 20% for accuracy-related issues
• Higher penalties for substantial understatement (greater than $5,000 or 10% of tax due)
Missing or Late Filing
• The IRS can match 1099-B data with your return
• Automated notices for discrepancies
• Possible audit triggers
• Penalties may increase with repeated non-compliance
How to Correct Mistakes
If you discover errors after filing:
• File Form 1040-X to amend your return
• Include corrected Schedule D and Form 8949
• Attach any supporting documentation
• Pay any additional tax due promptly to minimize interest charges
Remember that brokers send copies of all 1099-Bs to the IRS, making it essential to report accurately. If you have complex transactions or are unsure about reporting requirements, consider working with a tax professional who can help ensure proper filing and maximum tax efficiency.
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Frequently Asked Questions
What is the deadline for brokers to send Form 1099-B to customers?
Brokers are required to send Form 1099-B to customers by January 31 of the year following the tax year in which transactions occurred. Brokers must then file their copies with the IRS by February 28 if submitting paper forms, or by March 31 if filing electronically. If you haven't received your 1099-B by early February, contact your broker directly.
Is there a minimum dollar amount that triggers Form 1099-B reporting?
There is no minimum dollar threshold for Form 1099-B reporting — brokers must report all transactions regardless of the amount. This means even small trades in stocks, bonds, commodities, or securities must be documented and reported. Taxpayers should be careful not to omit any transactions, no matter how minor, as the IRS matches 1099-B data against filed returns.
How do short-term and long-term transactions get reported differently on a tax return?
Short-term transactions — those where the security was held for one year or less — are reported in Part I of Schedule D, while long-term transactions held for more than one year are reported in Part II. Before transferring totals to Schedule D, each transaction must be detailed individually on Form 8949, using boxes A, B, or C for short-term sales and boxes D, E, or F for long-term sales. Holding period classification matters significantly because long-term gains are generally taxed at lower capital gains rates.
What penalties can result from underreporting income that appears on Form 1099-B?
If you underreport income from broker transactions, the IRS may issue a CP2000 notice proposing additional taxes, along with interest charges calculated from the original due date of the return. Accuracy-related penalties can reach 20% of the unpaid tax, and cases involving a substantial understatement — defined as greater than $5,000 or 10% of the tax due — may trigger even higher penalties. Because brokers send copies of all 1099-Bs directly to the IRS, discrepancies between broker-reported data and your filed return are routinely detected through automated matching.
What should a taxpayer do if they discover an error on a previously filed return that included Form 1099-B transactions?
To correct a previously filed return, you must file Form 1040-X along with a corrected Schedule D and Form 8949 reflecting the accurate transaction details. Any supporting documentation, such as corrected 1099-B forms or trading records, should be attached to the amended return. It is important to pay any additional tax owed as promptly as possible, since interest continues to accrue from the original due date of the return.
About the Author
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Nick Charveron is a tax professional at IRS.com with expertise in U.S. federal and state tax law. Their articles are written to help taxpayers understand complex tax topics in plain English.