The 1099-B reports your investment sales to the IRS

Form 1099-B is a statement your broker sends you when you sell stocks, bonds, mutual funds, or other securities during the year. It lists what you sold, when you sold it, and the proceeds — the gross amount you received before any gains or losses. The IRS gets a copy too, which is why the numbers on your 1099-B need to match what you report on your tax return.

You will receive a 1099-B from any brokerage firm where you held investments and made sales. If you have accounts at multiple brokers, you will get one form from each. The form arrives by January 31 of the year following the sale, though some brokers send it earlier.

The 1099-B itself does not calculate your tax bill. It only reports what you sold and for how much. Your actual tax depends on whether you made a gain or loss, how long you held the investment, and your overall income — all things you have to figure out yourself or with a tax professional.

Key Takeaways

  • Your 1099-B shows the sale price of investments you sold, not your profit or loss — you must calculate that by comparing the sale price to what you paid.
  • The form arrives by January 31 and the IRS receives a matching copy, so discrepancies between your 1099-B and your tax return will trigger a notice.
  • Gains on investments held more than one year are taxed at lower long-term rates; gains on investments held one year or less are taxed as ordinary income.
  • If your broker did not have your cost basis on file, the 1099-B may show zero basis, requiring you to provide documentation of what you originally paid.

How the 1099-B connects to your tax return

You use the information on your 1099-B to fill out Schedule D, the form where you report capital gains and losses. For each sale listed on the 1099-B, you enter the proceeds, your cost basis (what you paid), and the date you sold it. Schedule D then calculates your gain or loss for each transaction.

If you have multiple sales, Schedule D totals them up. A net gain means you owe tax on the difference. A net loss can offset other income, up to $3,000 per year, with any excess carried forward to future years. This is why keeping records of what you paid for each investment is critical — the 1099-B only tells you what you sold it for.

The IRS matches the proceeds reported on your 1099-B against what you report on Schedule D. If the numbers do not line up, the IRS will send you a notice asking for an explanation. This is one of the most common triggers for IRS correspondence, so accuracy matters.

Cost basis and what happens when your broker does not have it

Cost basis is what you originally paid for the investment, including any fees or commissions. It is the number you subtract from the sale price to find your gain or loss. Your broker is required to track and report cost basis on the 1099-B, but only for securities purchased after January 1, 2011. For older holdings, your broker may not have the information.

When cost basis is missing or incomplete, the 1099-B will show a basis of zero or be marked with a code indicating the basis was not reported. You are still responsible for finding that information and reporting the correct gain or loss. If you bought the investment decades ago and have no records, you may need to contact the original broker, check old statements, or work with a tax professional to reconstruct the basis.

Reporting a zero basis when you actually had a cost basis means overstating your gain and paying more tax than you owe. This is worth the effort to track down, especially for large sales or long-held positions.

Long-term versus short-term capital gains

The tax rate on your investment gain depends on how long you held it. If you owned the investment for more than one year before selling, the gain is long-term and taxed at preferential rates: 0%, 15%, or 20% depending on your income level. If you held it one year or less, the gain is short-term and taxed as ordinary income at your regular tax bracket, which can be as high as 37%.

Your 1099-B will indicate whether each sale is long-term or short-term based on the holding period. Schedule D separates them into two sections, and you calculate the tax on each group differently. This is one reason to hold investments longer when possible — the tax savings can be substantial.

The one-year holding period is measured from the purchase date to the sale date. If you bought on June 15, 2023 and sold on June 15, 2024, it is long-term. If you sold on June 14, 2024, it is short-term. Some investors deliberately time sales to cross the one-year threshold.

What to do if your 1099-B has errors

Review your 1099-B as soon as you receive it and compare it to your own records. Check the sale dates, the proceeds, and the cost basis. If something is wrong — a sale listed twice, an incorrect amount, or a holding period marked incorrectly — contact your broker when ready and ask for a corrected form.

Brokers issue corrected 1099-Bs, usually marked as such, and send them to you and the IRS. If you catch an error before filing your return, wait for the corrected form and use that. If you have already filed and then discover an error, you will need to file an amended return using Form 1040-X.

Do not ignore discrepancies. The IRS computer system will flag mismatches between your return and the 1099-B data, and you will receive a notice. It is far easier to correct the problem upfront than to respond to an IRS letter months later.

Multiple 1099-Bs and consolidated reporting

If you have accounts at more than one brokerage, you will receive a separate 1099-B from each one. You must report all of them on your Schedule D. Some brokers offer a consolidated view in their tax documents section, but the official 1099-B forms come separately.

When you have many sales across multiple accounts, organizing them before you file becomes important. Some tax software will import 1099-B data directly from brokers if you connect your account, which can reduce manual entry errors. If you enter them by hand, double-check the totals.

If you sold securities at a loss in some accounts and a gain in others, you can net them together on Schedule D. This is one advantage of having multiple accounts — you can harvest losses in one account to offset gains in another, a strategy called tax-loss harvesting.

When you might need professional help

A straightforward 1099-B with one or two sales and clear cost basis is straightforward to handle yourself. But if you have dozens of transactions, missing cost basis, inherited securities, stock options, or wash sales (selling at a loss and buying back the same security within 30 days), a tax professional can save you money and headaches.

Wash sales are particularly tricky because they disallow the loss you claimed and add it to the basis of the replacement security instead. The IRS does not always catch them, but if you are audited, they will. A tax professional can identify wash sales across all your accounts and adjust your reporting accordingly.

If you are doing tax-loss harvesting intentionally or managing a large portfolio, working with a CPA or tax advisor who understands securities is worth the cost. They can also advise on timing sales to manage your tax bracket or coordinate with other income and deductions.

Frequently Asked Questions

Do I have to report every 1099-B sale on my tax return?

Yes. The IRS receives a copy of every 1099-B your broker files, so every sale must appear on your Schedule D. Even if you made a loss on a sale, you still report it — losses offset gains and can reduce your taxable income.

What if I lost money on an investment — do I still get a 1099-B?

Yes. Your broker reports all sales, whether they resulted in gains or losses. The 1099-B shows the proceeds you received; you calculate the loss by comparing that to your cost basis. Losses are valuable for tax purposes, so report them.

Can I use my 1099-B to calculate my cost basis if my broker did not report it?

No. The 1099-B only shows what you sold it for, not what you paid. You must find your original purchase records — old statements, confirmations, or account history — to establish cost basis. If records are truly unavailable, a tax professional can help you reconstruct it or discuss your options with the IRS.

What happens if my 1099-B proceeds do not match what I actually received?

Contact your broker and ask for a corrected form. Brokers sometimes misreport proceeds due to data entry errors or confusion about fees and commissions. Once you have the corrected 1099-B, use that on your return. If you have already filed, file an amended return.

Do I need to attach my 1099-B to my tax return?

No. You report the information from your 1099-B on Schedule D, but you do not mail the form itself to the IRS. Keep your 1099-B and your brokerage records for at least three years in case of an audit.