What Form 1099-B (2013) Is For
Form 1099-B (2013) explains how brokers report gain or loss amounts that affect your capital gains tax obligations. The form includes the original purchase price, the adjusted cost basis, and information that applies to mutual funds and other capital assets. The reported data also reflects the gross proceeds and capital gains taxes associated with each investment.
The form identifies both covered and non-covered securities that affect taxable gains and net capital gains. You can review each entry to confirm the fair market value details and evaluate whether the gain is a long-term or short-term capital gain. Our team can guide you through each requirement with clear, step-by-step instructions.
When You’d Use Form 1099-B (2013)
Form 1099-B reaches you when financial institutions report investment activity that influences your cost basis and capital gains requirements. The form supports your tax return because it lists gross proceeds, purchase information, and details for each capital asset you sold. You can use these entries to review long-term capital gains and short-term capital gains.
The form reflects reinvested dividends, stock splits, and wash sales that change figures for a covered security. You can confirm adjustments that shape net capital gain amounts on your tax return. Our team can help you apply these details when reviewing key 2013 rules.
Find all the essential IRS forms you need in our comprehensive forms section.
Key Rules or Details for 2013
Form 1099-B reflects reporting rules that separate covered and noncovered securities for capital gains taxes. The 2013 calendar year required brokers to include information that supports accurate reporting for mutual funds and other capital assets. Taxpayers can use these figures to evaluate net capital gains reported on Schedule D.
Brokers applied the average cost method for mutual funds and the FIFO method for many other investments. Each financial institution reported the per-share cost basis for the same security in the same account. Investors reviewed each entry to confirm how different rules shaped the final cost basis.
The form also identified the activity that triggered the wash sale rule for substantially identical stock. Wash sales affected taxable income because they changed the reported cost basis for related transactions. You can use these insights to prepare for the step-by-step process that follows.
Step-by-Step (High Level)
You can follow precise steps to support calculating cost basis requirements on Form 1099-B. These steps guide your use of cost basis methods for many capital assets. Each step provides structure that helps you prepare accurate figures for your tax return.
- The taxpayer identifies the original cost, the original value, and any adjustments resulting from the original owner's death.
- The taxpayer adds additional costs and reinvested dividends that increase the adjusted cost basis.
- The taxpayer determines whether the investment qualifies as a covered security or a non-covered security and locates the CUSIP number.
- The taxpayer applies the correct cost basis method, such as the FIFO method or the average cost basis approach.
- The taxpayer confirms wash sale activity by using complete records and comparing them with similar security types.
Common Mistakes and How to Avoid Them
Many taxpayers make errors when they report a covered security because they skip necessary checks for each gain or loss. You may enter the wrong purchase price or overlook fair market value details that influence taxable gain amounts. You can avoid these problems by verifying every figure against complete records.
- Misstated Purchase Price: A taxpayer may record the wrong amount, but can avoid this mistake by ensuring the entries match the original cost documents.
- Incorrect Fair Market Value: A taxpayer may list values that differ from broker reports, and the taxpayer can prevent this issue when each figure matches the corresponding statement.
- Incorrect Schedule Entry: A taxpayer may incorrectly record long-term gain items. To mitigate this risk, each line on Schedule D should undergo a thorough review.
- Roth IRA Confusion: A taxpayer may apply rules that do not apply to the account, and the taxpayer can avoid confusion when the correct filing requirements guide the review.
- Similar Security Error: A taxpayer may misinterpret related securities, and this issue can be corrected through a careful review of each transaction.
You can improve accuracy by verifying each detail closely. You can protect your return by organizing documents clearly. You can move to the next section to learn how the IRS processes your filing.
What Happens After You File
The IRS reviews your filing and compares reported gross proceeds, cost basis methods, and gain or loss amounts with the information on Form 1099-B. The agency evaluates entries connected to each CUSIP number and identifies differences that appear in your tax return. You may receive questions when covered and non-covered securities show mismatched figures.
The IRS may request clarification when investment strategy details or other transactions appear inconsistent across forms. You can contact a tax professional for guidance on tax forms, questions about taxable incomes, or issues related to wash sales. You can continue to the next section for direct answers to common filing questions.
FAQs
How do I calculate the adjusted cost basis for investments purchased over a year or in the same year?
You calculate the adjusted cost basis when reviewing shares purchased, additional costs, and organizational actions that have changed the original figures. You can use cost basis methods, such as the average cost basis or specific identification, when evaluating gain or loss outcomes. You may confirm each value with your own records to support accurate reporting.
How do I handle a covered security with a confusing holding period?
You review the holding period to confirm whether the transaction resulted in a short-term gain or a long-term gain. You can classify the sale correctly by tracking when you purchased the investment and when you sold it. You can consult with a tax professional if you need assistance with complex holding period situations.
How do I report wash sales for tax purposes related to capital gains?
You report wash sales when you see that organizational actions or other transactions created a replacement purchase at a lower price. You adjust gain or loss calculations to reflect the disallowed amount and enter the corrected figures on your tax forms. You can offset capital gains accurately when you use complete documentation.
What should I do when I cannot find a CUSIP number or cost basis amount?
You review broker statements and other records for the CUSIP number associated with the investment. You may also evaluate market conditions and compare similar entries to verify the correct cost basis information. You can request guidance from a tax professional if you need help confirming missing data.
How do filing rules differ for married filing jointly and married filing separately?
You follow the capital gains tax rules for your filing status when you calculate ordinary income and net capital loss limitations. You may see different thresholds for married filing jointly and married filing separately when you prepare your tax forms. You can choose the filing status that supports your investment strategy and long-term planning.
