Form 1099-B: Understanding Your Brokerage and Investment Sales

What Form 1099-B reports

Form 1099-B is a record of sales you made through a brokerage account — stocks, bonds, mutual funds, options, or other securities. Your broker sends you this form (and the IRS a copy) to report what you sold, when you sold it, and how much you received. The IRS uses it to match against your tax return and verify you reported all your investment income.

You receive a separate 1099-B for each brokerage where you traded. If you sold nothing during the year, you will not receive one. If you bought securities but did not sell them, they do not appear on this form — only completed sales show up.

The form arrives by January 31 of the year after the sale. If you traded heavily or late in December, your broker may send a corrected version (marked "CORRECTED") in February or March.

Key Takeaways

• Form 1099-B reports the sale price and date of securities you sold through a brokerage, not the profit or loss.
• You must report the sale on Schedule D (Capital Gains and Losses) and calculate your own gain or loss by subtracting what you paid from what you received.
• If your broker has your cost basis on file, it will appear in Box 1e; if not, you must find your purchase records and enter the cost yourself.
• Wash sales (selling at a loss and buying the same security within 30 days) reduce your loss deduction and must be tracked separately.
• You need the 1099-B to file your return, but the form itself does not go to the IRS with your tax return — only the summary from Schedule D does.

Where to find the sale information on the form

The 1099-B has multiple boxes, but most readers need only a few. Box 1a shows the description of what you sold (for example, "100 shares Apple Inc. common stock"). Box 1b shows the date you sold it. Box 1d shows the gross proceeds — the total amount you received before any fees or taxes.

Box 1e is the critical one: your cost basis, or what you originally paid for the security. If your broker has this information because you bought the shares through them, Box 1e will be filled in. If you bought the shares elsewhere or long ago, Box 1e may be blank or show "not reported to IRS." When Box 1e is blank, you must find your own purchase records and calculate the cost yourself.

The difference between Box 1d (what you sold it for) and Box 1e (what you paid) is your capital gain or loss. You report this on Schedule D, not on the 1099-B itself. The 1099-B is a record; Schedule D is where you do the math.

When you need to report a 1099-B on your tax return

You report every sale on Schedule D (Capital Gains and Losses), which is part of Form 1040. Even if you had a loss, you must report it — losses reduce your other income and can carry forward to future years if they exceed your gains.

If you had only one or two small sales and they resulted in a net loss for the year, you can deduct up to $3,000 of that loss against your other income (wages, interest, dividends). Any loss above $3,000 carries to the next year. If you had gains, you owe tax on them at either short-term rates (same as your ordinary income tax rate, for securities held one year or less) or long-term rates (usually 0%, 15%, or 20%, for securities held more than one year).

The IRS receives a copy of your 1099-B directly from your broker. If you do not report the sale on your return, or if the numbers do not match, the IRS will send you a notice. Reporting the sale, even if you disagree with the cost basis, prevents a mismatch notice.

How to handle missing or incorrect cost basis

If Box 1e is blank, your broker either did not have the purchase information or the purchase happened before the broker's records began. You must locate your own records: old brokerage statements, confirmation emails, or a cost basis report from a previous broker if you transferred the shares.

If you cannot find the exact cost, you can use a reasonable estimate based on what you remember, but keep notes about how you arrived at that number. The IRS may ask for proof later. If you genuinely cannot find any record, you can report the entire sale price as gain, though this overstates your tax; you can then file an amended return if you find the records later.

If Box 1e is filled in but you believe it is wrong — for example, your broker shows a cost of $50 per share but you know you paid $45 — contact your broker's customer service with your proof (old statements, trade confirmations). They can issue a corrected 1099-B if the error is theirs. If you disagree with their figure but cannot prove it, report what the form shows and keep your own records in case the IRS questions you.

Wash sales and how they affect your reported loss

A wash sale occurs when you sell a security at a loss and buy the same or a substantially identical security within 30 days before or after the sale. The IRS disallows the loss in the year you sold it and adds it to the cost basis of the new purchase instead, deferring the loss to a future year when you sell the replacement security.

Your 1099-B will not automatically flag a wash sale — that is your responsibility to track. If you sold 100 shares of a mutual fund at a $2,000 loss on December 15 and bought 100 shares of the same fund on January 10, you have a wash sale. You cannot deduct the $2,000 loss on your current-year return. Instead, you add $2,000 to the cost basis of the new shares, so when you eventually sell those, your loss will be smaller (or your gain larger).

Wash sales are common in December when investors try to lock in losses for tax purposes. If you plan to sell at a loss, wait until after the 30-day window closes before buying back in, or buy a different but similar fund in the meantime.

Multiple 1099-Bs and how to organize them

If you have accounts at more than one brokerage, you will receive a separate 1099-B from each one. You must report every sale from every form on a single Schedule D. Create a list of all your sales before you start filling out Schedule D, organized by whether each was short-term (held one year or less) or long-term (held more than one year). This makes it easier to catch errors and to calculate your net gain or loss.

Keep all your 1099-Bs in a folder with your tax return. You do not mail them to the IRS, but you must keep them for at least three years in case the IRS asks for proof of a particular sale.

Frequently Asked Questions

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

Yes. You report every sale on Schedule D, whether it was a gain or a loss. Losses reduce your taxable income and can carry forward to future years. If you do not report the sale, the IRS will see the 1099-B they received from your broker and send you a notice asking why you did not report it.

What if my broker sent me a 1099-B but I did not actually sell anything?

Contact your broker when ready. A 1099-B should only be issued for completed sales. If they issued one by mistake, they will send you a corrected form showing zero proceeds. Do not file your return until you have the corrected form, or you will have to amend later.

Can I use the gross proceeds from Box 1d as my capital gain?

No. Box 1d is what you received before subtracting what you paid. Your capital gain is Box 1d minus Box 1e (or your own cost if Box 1e is blank). If you sold for $10,000 and paid $6,000, your gain is $4,000, not $10,000.

What happens if I lose my 1099-B?

Contact your broker and request a duplicate or a copy of the form. They keep records for at least seven years. You can also log into your brokerage account online — most brokers let you read prior-year 1099-Bs from the tax documents section.

Do I report the 1099-B itself to the IRS, or just the information from it?

You report the information on Schedule D. The 1099-B itself stays with your records. The IRS receives their own copy directly from your broker, so they already know about the sale. Your job is to report it on your return so they can match the two.