Form 1099-B: What It Reports and How to Use It

Form 1099-B is among the most important—and often least understood—tax forms for investors. Whenever you sell stocks, mutual funds, ETFs, bonds, options, or other securities in a year, your broker must report those sales to the IRS on Form 1099-B. You receive a copy, and that information drives how your capital gains or losses are figured on your return.

The IRS gets the same data your broker sends you, so mistakes or gaps on Form 1099-B often lead to IRS notices. Knowing how the form works, what it shows, and how to use it when filing is important for correct tax reporting and lower audit risk.

What Is Form 1099-B?

Form 1099-B reports proceeds from certain financial transactions, primarily the sale or exchange of investment property.

Definition of Form 1099-B

Form 1099-B’s full title is Proceeds from Broker and Barter Exchange Transactions. It’s an IRS information return that brokers and barter exchanges use to report sales or other dispositions of property. Usually the property is a capital asset—for example, publicly traded stock or a mutual fund—but the form can cover other exchanges of value as well.

When a broker issues Form 1099-B, they send one copy to you and another to the IRS. That allows the IRS to verify that the transactions on your tax return match what the broker reported.

Why the IRS Requires Form 1099-B

Third-party reporting is a big part of how the IRS enforces tax compliance. Form 1099-B lets the IRS check that capital gains and losses are reported correctly. When a sale shows up on 1099-B but not on your return, automated systems can flag it and send a notice proposing extra tax.

Form 1099-B and Cryptocurrency: What Changed in 2025

Form 1099-B is still used for traditional investments like stocks, bonds, mutual funds, and ETFs. It was never designed for the complexity of cryptocurrency. To address that gap, the IRS introduced Form 1099-DA, which standardizes reporting for digital assets such as cryptocurrency and NFTs.

For the 2025 tax year (forms issued in 2026), crypto brokers are only required to report gross proceeds; cost basis reporting is optional during this transition. Starting with the 2026 tax year, cost basis reporting becomes mandatory for covered digital assets acquired on or after January 1, 2026.

Who Must File Form 1099-DA?

Form 1099-DA must be issued by custodial crypto exchanges, hosted wallet providers, digital asset kiosks, and certain payment processors. DeFi platforms and non-custodial wallets are exempt from these reporting requirements through at least 2027.

Important Warning for Crypto Investors in 2025

Most Form 1099-DA forms issued in 2026 for 2025 transactions may be incomplete or inaccurate because brokers are not yet required to report cost basis. Taxpayers should not rely solely on Form 1099-DA when preparing returns. Keeping your own transaction records and calculating gains and losses independently remains essential. If a digital asset qualifies as both a security and a digital asset (dual-classification), brokers will generally file Form 1099-DA instead of Form 1099-B.

What Does Form 1099-B Report?

Form 1099-B focuses on transactions involving the sale or disposition of property, not income you receive simply by holding an investment.

Investment Transactions Commonly Reported

Most Form 1099-B forms come from brokerage activity: selling stock, redeeming a mutual fund, closing an ETF position, or disposing of a bond. Options trading, short sales, and certain debt instruments are also commonly included. The form generally reports gross proceeds and, in many cases, your cost basis and whether the gain or loss is short-term or long-term.

Barter Exchange Transactions

Barter exchange transactions are reported on Form 1099-B as well. When you receive goods or services in trade instead of cash, the fair market value of what you receive is generally taxable income. Barter exchanges must report that value on 1099-B even when no cash is involved. For instance, if you swap consulting work for office equipment through a barter exchange, the equipment’s value is usually reported on 1099-B and may be taxable.

Who Receives Form 1099-B?

Not every taxpayer receives Form 1099-B, but it is very common among investors.

Investors and Brokerage Account Holders

If you sold securities through a brokerage account in the tax year, you’ll typically get a Form 1099-B. A single sale is enough to generate one. Frequent traders often get long 1099-Bs listing many transactions.

Other Situations That Trigger Form 1099-B

Form 1099-B may also be issued when an estate sells inherited securities, when transactions are processed through a barter exchange, or when certain corporate actions result in a reportable disposition.

When a Form 1099-B Is Not Issued

There are cases where no Form 1099-B is issued even though investment activity exists. Dividends and interest are reported on different forms, and unrealized gains are not reported at all. The absence of Form 1099-B does not mean a transaction is non-taxable; taxpayers are still responsible for reporting all taxable sales.

When Is Form 1099-B Issued?

Understanding timing is important, especially for taxpayers who file early.

Broker Deadlines and Delivery Timing

Brokers are generally required to furnish Form 1099-B to taxpayers by February 15 following the end of the tax year. For 2025 forms, the 2026 deadline is February 17 (since the 15th falls on a weekend and the 16th is a federal holiday). Brokers must file 1099-Bs with the IRS by March 2, 2026 if paper filing and by March 31 if e-filing.

In practice, taxpayers can expect their 1099-B in late February or early March, particularly when mailed. Form 1099-B may be bundled with Forms 1099-DIV and 1099-INT in a consolidated statement. Filing early in 2026 before you receive all necessary forms can lead to penalties, interest, and amended returns.

Corrected Form 1099-B

Brokers sometimes send corrected 1099-Bs. Common fixes include cost basis, wash sale adjustments, or how transactions are classified. Filing before you have all corrected forms can mean amended returns or follow-up IRS letters.

What Information Is Included on Form 1099-B?

Form 1099-B contains detailed transaction-level data that feeds into your tax return.

Property Description and Transaction Dates

Each transaction includes a description of the property sold, the date the asset was acquired, and the date it was sold or disposed of. These dates determine whether the gain or loss is short-term or long-term for tax purposes.

Gross Proceeds and Cost Basis

The form reports gross proceeds (amount received from the sale before commissions or fees). For many securities the broker also reports cost basis (what you paid). Securities are categorized as covered or noncovered depending on whether the broker must report basis to the IRS. Even when basis is reported, taxpayers are responsible for verifying its accuracy.

Adjustments, Withholding, and Special Codes

Wash sale adjustments, disallowed losses, or federal income tax withholding may also appear on 1099-B. These items can change the taxable amount on your return in important ways.

How Form 1099-B Is Used When Filing Your Taxes

Form 1099-B itself is not attached to your return, but the information on it is essential.

IRS Matching and Reporting

The IRS uses Form 1099-B to match reported proceeds against your tax return. When proceeds are reported but not accounted for on Schedule D or Form 8949, the IRS may assume the entire amount is taxable even if your actual gain was much smaller.

Where the Information Appears on Your Return

1099-B transactions are usually reported on Form 8949 and then carried to Schedule D. Many programs import this data for you; still, you should review it by hand to make sure it’s correct.

Do You Have to Pay Taxes on Amounts Reported on Form 1099-B?

The amounts on Form 1099-B are not automatically taxable in full.

Capital Gains and Capital Losses

Selling an investment above cost basis usually produces a capital gain; selling below produces a capital loss. Losses can offset gains and, in certain situations, reduce ordinary income.

For example, assume you bought 100 shares of ABC stock for $5,000 in 2023 and sold them in 2025 for $7,500. Your Form 1099-B would show Box 1d (Proceeds): $7,500 and Box 1e (Cost basis): $5,000. Your capital gain is $2,500 ($7,500 − $5,000), taxed at long-term rates because you held the stock more than one year.

Holding Period and Tax Rates

The holding period determines whether a gain or loss is short-term or long-term. Short-term gains are taxed at ordinary income tax rates; long-term gains may qualify for preferential rates.

Situations Where Proceeds Are Not Fully Taxable

Certain transactions involve adjustments that reduce or eliminate taxable gain, such as prior return-of-capital distributions or basis increases from reinvested dividends. Relying solely on gross proceeds without reviewing basis can lead to overpaying tax.

Cost Basis Reporting Rules Explained

Cost basis reporting is one of the most complex aspects of Form 1099-B.

Covered and Noncovered Securities

Covered securities are those for which brokers must report cost basis to the IRS, generally based on when the asset was acquired. Noncovered securities require the taxpayer to supply basis information, making accurate recordkeeping essential.

Common Sources of Basis Errors

Mistakes often show up after broker-to-broker transfers, inherited or gifted securities, or corporate actions like mergers and spin-offs. Even when the broker reports basis, you’re still responsible for fixing errors.

Special Situations That Affect Form 1099-B Reporting

Certain transactions require extra attention when reviewing Form 1099-B.

Barter Exchanges

Barter exchanges must report the fair market value of exchanged goods or services, and this value is generally taxable. These transactions are often misunderstood because no cash is received.

Corporate Actions and Basis Adjustments

Corporate actions can significantly affect cost basis. Brokers may report issuer-provided adjustments; taxpayers should retain documentation to support any corrections.

Qualified Opportunity Funds and Transfers

Dispositions involving Qualified Opportunity Funds or transfers between brokers introduce additional reporting complexity, particularly when basis reporting responsibilities shift.

What to Do If You Don't Receive Form 1099-B

If you think you should have gotten a 1099-B but didn’t, you still must report the transaction. Forms often go missing due to late-year activity, closed accounts, or processing delays. You can use brokerage statements and trade confirmations to report the right numbers.

What to Do If There's an Error on Your Form 1099-B

Typical problems are wrong cost basis, incorrect acquisition dates, or misreported wash sales. Usually the best step is to ask the broker for a corrected 1099-B. If you don’t get it in time, you can make adjustments on Form 8949 with supporting records.

Form 1099-B Mistakes That Trigger IRS Audits

The IRS receives copies of every Form 1099-B and automatically flags returns when reported income doesn't match. The following mistakes are among the most common audit triggers.

1. Leaving 1099-B transactions off your return: If the IRS receives a 1099-B showing a sale you didn't report, it triggers an immediate mismatch—even for small or forgotten transactions.
2. Reporting incorrect proceeds: Amounts in Box 1d must match what's reported on Schedule D. Rounded or estimated numbers often signal errors.
3. Assuming a zero cost basis: When cost basis isn't reported, the IRS may assume it's zero and tax the full proceeds. This frequently affects inherited assets, transferred accounts, and crypto.
4. Ignoring wash sale adjustments: Claiming losses that are not allowed under wash sale rules (shown in Box 1g) creates a guaranteed mismatch.
5. Filing before corrected forms arrive: Filing early and later receiving a corrected 1099-B can result in inconsistent IRS records. Waiting until mid-February or early March reduces this risk.
6. Missing one of multiple 1099-B forms: Forgetting to report a brokerage account when you have multiple brokers creates an obvious reporting gap.
7. Crypto reporting gaps in 2025: Transactions on Form 1099-B or 1099-DA that don't appear on your return are easily flagged, giving the IRS increased visibility into crypto activity.

How to Avoid These Audit Triggers

Before filing, confirm you have all expected 1099s; request corrected forms when necessary and match every transaction on Form 8949 to your 1099-Bs. Maintain solid cost basis records for inherited assets, transferred accounts, and crypto. Keep supporting documents for at least three years.