What Your 1099-B Form Means and Why Your Broker Sends It

The 1099-B reports every stock, bond, mutual fund, or cryptocurrency sale you made through a brokerage account during the year

A 1099-B is a record of transactions, not income. Your broker sends it to you and the IRS when you sell an investment at a gain or loss. The form lists what you sold, when you sold it, how much you received, and what your cost basis was — the original price you paid. The IRS uses this to verify that you reported the correct gain or loss on your tax return.

You receive a 1099-B if you sold securities through any brokerage firm, including online brokers like Fidelity, Charles Schwab, E-Trade, or Robinhood. You also get one if you sold cryptocurrency on an exchange. The broker is required by law to send it to you by January 31 of the year following the sale, and they file a copy with the IRS at the same time.

The key thing to understand: the 1099-B is not a bill or a tax bill. It is documentation. You use it to fill out Schedule D (Capital Gains and Losses) on your tax return. If you sold something at a loss, the 1099-B helps you prove that loss to the IRS.

Key Takeaways

• A 1099-B lists every investment you sold through a brokerage account, including the sale price, the date, and what you originally paid for it.
• You receive a 1099-B only if you actually sold something; holding an investment and watching it gain or lose value does not trigger one.
• The form goes to both you and the IRS, so the IRS already has a record of your transactions before you file your return.
• You must report the gains and losses from your 1099-B on Schedule D, and the numbers must match what the IRS received or you may face a notice.
• Cost basis — what you originally paid — is the most common source of errors on 1099-B forms and can lead to overstating your gain.

What each section of the 1099-B tells you

The form is divided into two main parts. Box 1a shows the proceeds — the total amount of money you received when you sold the investment. Box 1b shows your cost basis, which is what you paid for it originally. The difference between these two numbers is your gain or loss.

Boxes 2 and 3 show the dates: when you bought it and when you sold it. These dates matter because the IRS taxes long-term gains (held over one year) at a lower rate than short-term gains (held one year or less). Your broker uses these dates to sort your transactions into the right category on the form.

Box 5 shows the type of security: stock, mutual fund, bond, or other. Box 6 tells you whether the gain or loss is short-term or long-term. If you see a code in Box 6, your broker has already done the sorting for you. If the box is blank, you will need to figure out the holding period yourself by comparing the buy and sell dates.

Why cost basis errors are the most common problem

The biggest source of mistakes on 1099-B forms is incorrect cost basis. This happens most often when you buy shares over time, reinvest dividends, or transfer shares from one broker to another. Your new broker may not have the original purchase price, so they report a cost basis of zero or an estimate.

If your cost basis is wrong, your reported gain will be wrong too. For example, if you bought 100 shares at $10 each (cost basis $1,000) and sold them at $50 each (proceeds $5,000), your gain is $4,000. But if the broker reports cost basis as zero, the IRS will see a $5,000 gain. You will owe tax on the extra $1,000 you did not actually make.

Before you file your return, compare the cost basis on your 1099-B to your own records. If they do not match, contact your broker and ask for a corrected form. Most brokers can issue a corrected 1099-B (called an amended form) if you provide documentation of the original purchase.

How to use your 1099-B when filing taxes

You report the information from your 1099-B on Schedule D (Capital Gains and Losses). You list each transaction separately: the description of the security, the date acquired, the date sold, the proceeds, the cost basis, and the gain or loss. If you have many transactions, you may use Form 8949 (Sales of Capital Assets) instead, which feeds into Schedule D.

The IRS matches the totals from your Schedule D to the totals they received on the 1099-B from your broker. If the numbers do not match, you may receive a notice asking you to explain the difference. This is why accuracy matters and why you should keep your own records of every transaction.

If you use tax software like TurboTax or H&R Block, you can often import your 1099-B data directly from your broker. The software will pre-fill Schedule D for you. However, you should still review the entries to catch any cost basis errors before you file.

What happens if you do not receive a 1099-B

If you sold an investment but did not receive a 1099-B, contact your broker. They are required to send one if you sold anything during the year. If the broker says they did not send one because the transaction was small or because you transferred the shares rather than sold them, ask for a written explanation.

You are still required to report the sale on your tax return even if you do not receive a 1099-B. The IRS may have received one from the broker anyway, or they may not have — but either way, you cannot skip reporting a sale just because the form did not arrive. If you sold something and did not get a 1099-B, use your own records to fill out Schedule D.

1099-B for cryptocurrency and special situations

Cryptocurrency exchanges issue 1099-B forms for sales just like stock brokers do. If you sold Bitcoin, Ethereum, or any other cryptocurrency on an exchange, you should receive a 1099-B. The form works the same way: it shows what you sold, when, for how much, and what your cost basis was.

Some exchanges have been slow to issue 1099-B forms or have issued them with errors. If your exchange did not send one, you are still required to report the sale. Use your transaction history from the exchange to reconstruct the information and fill out Schedule D yourself.

If you transferred shares or cryptocurrency to another account without selling, you do not get a 1099-B. A transfer is not a taxable event. You only get a 1099-B when you actually sell and receive money.

Frequently Asked Questions

Do I have to report a 1099-B if I had a loss?

Yes. Even if you lost money on the sale, you must report it on Schedule D. Capital losses can offset capital gains, and if your losses exceed your gains, you can deduct up to $3,000 of the loss against other income. Any loss above that carries forward to future years.

What if the cost basis on my 1099-B is blank or says zero?

Contact your broker when ready and ask them to correct it. Brokers are required to report cost basis if they have it. If they cannot find your original purchase records, ask what documentation they need from you. You may need to provide your original confirmation statements or account statements from when you bought the shares.

Can I ignore a 1099-B if I think the numbers are wrong?

No. The IRS has a copy of the form, so they know about the transaction. If you report different numbers on your tax return, you will likely receive a notice. If the form is wrong, get a corrected one from your broker before you file, or attach a statement to your return explaining the discrepancy.

Do I need a 1099-B if I just bought and held stock all year?

No. You only receive a 1099-B if you sold something. If you bought shares and still own them, there is no 1099-B. You will get one when you eventually sell.

What if I sold shares from multiple brokers?

You will receive a separate 1099-B from each broker. You must report all of them on the same Schedule D. Add up all the gains and losses from all your brokers to get your total capital gain or loss for the year.