How to Read Your Form 1099-B

If you sell any stocks, mutual funds, bonds or securities during the year, your broker will probably send you a Form 1099-B. This form details your proceeds from capital transactions and is used to complete Schedule D of your tax return.

Payee Information

The left, non-numbered side of Form 1099-B details your personal information and your broker's information. Your broker lists its federal identification number and your federal ID number -- or Social Security number -- so the IRS can link the sale proceeds to the correct taxpayer and firm. Along with your address, your broker may include your brokerage account number. This can help you keep track of information if you have more than one account with the broker. The CUSIP number is a specific number assigned to identify the stocks and bonds you sold. "2nd Tin Not" will only be checked if the IRS notified your broker that you provided an incorrect tax ID.


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Box 1a Through Box 1g

Box 1a lists the name of the company whose stock you sold. Boxes 1b and 1c note the dates you purchased and sold the stocks. Boxes 1d and 1e represent the amount you bought the securities for and how much you sold them for. If box 1d is larger than box 1e, you have a capital gain. If there's a code listed in box 1f, that means you have some sort of unusual transaction. For example, a "W" indicates a wash sale and "C" indicates that the items you sold were collectibles. Box 1g will list any adjustments due to the events marked in 1f. A common adjustment in box 1f is losses disallowed due to wash sales. Wash sales occur when you sell a security at a loss and buy an identical security 30 days before or after the sale. The IRS sees this as an attempt to claim an artificial capital loss, so any losses from the sale of a wash sale security are disallowed and can't be deducted.


Box 2 Through Box 6

You'll know if you have a short-term or long-term transaction by what's marked in box 2. If you held the security for more than a year, any gains are long-term and taxed at a more favorable tax rate. Box 3 will be checked if the broker reported your basis information to the IRS. Box 4 lists any federal income tax withheld. Box 5 will be checked if the security is non-covered. This means the broker didn't alert the IRS of your basis. If it was reported, box 6 will be checked instead.



Box 7 through Box 16

It's unlikely you'll have any information listed in boxes 7 through 13. Information is only reported in these boxes in unusual situations, like if you buy and sell contracts or a loss is disallowed because of a change in capital structure. If they are checked, refer to the IRS "Instructions for Form 1099-B" and your tax professional for further guidance. Boxes 14 through 16 may have information though -- these report the amount of taxes withheld by the state and your state identification number.



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