Form 1099-B: Proceeds From Broker and Barter Exchange Transactions (2024)

What the Form Is For

Form 1099-B is an information return that reports the sale of stocks, bonds, mutual funds, cryptocurrencies (digital assets), commodities, and other securities you sold during the tax year. Think of it as a receipt from your broker documenting all your investment transactions.

Who receives this form?
If you sold investments through a brokerage account or participated in a barter exchange during 2024, your broker or barter exchange must send you Form 1099-B by February 18, 2025. The IRS receives a copy too, so they know about your transactions.

Key information on the form includes:

Description of the property sold (type and quantity of securities)
Date you bought the investment (acquisition date)
Date you sold it
Sale proceeds (how much you received)
Cost basis (what you originally paid, including fees)
Whether the gain or loss is short-term (held one year or less) or long-term (held more than one year)
Any wash sale loss adjustments

The form essentially provides the raw data you need to calculate your capital gains or losses – the difference between what you paid for an investment and what you sold it for.

When You'd Use It (Late/Amended)

Normal Timeline

You'll receive Form 1099-B by mid-February for the previous tax year. Use this information when preparing your tax return, which is typically due April 15.

Late or Corrected Forms

Sometimes brokers discover errors and must issue corrected 1099-B forms. If you receive a corrected form after you've already filed your tax return, you may need to file an amended return (Form 1040-X) if the changes affect your tax liability. However, if the correction results in you owing less tax or receiving a larger refund, you're not penalized for filing the original return with the incorrect information.

Important Timing Notes

Brokers have until three years after filing the original form to send corrections
You generally have three years from your original filing date to amend your return and claim a refund
If you filed your return early (before the April deadline), the three-year window counts from the April tax deadline, not your actual filing date

When to Amend

If a corrected 1099-B shows you owe more tax, file an amended return promptly to minimize interest charges. If it shows you're owed a refund, you have up to three years to claim it.

Key Rules for 2024

Covered vs. Noncovered Securities

“Covered securities” are investments acquired after certain dates (generally 2011 for stocks, 2012 for mutual funds, 2014 for bonds) where your broker must track and report your cost basis to the IRS. For “noncovered securities,” brokers report the sale but may not report cost basis – you're responsible for tracking this information.

Digital Assets (Cryptocurrency)

Starting in 2025, sales of digital assets like Bitcoin and Ethereum are reported on Form 1099-DA instead of Form 1099-B, with some exceptions for dual-classification assets and section 1256 contracts. For 2024 transactions, brokers may still use Form 1099-B for certain digital asset sales.

Wash Sale Rules

If you sell a security at a loss and buy the same or “substantially identical” security within 30 days before or after the sale (a 61-day window), the loss is disallowed for the current year. Your broker will note this in Box 1g, and the disallowed loss gets added to the cost basis of your replacement shares.

Short-Term vs. Long-Term

Holdings of one year or less are short-term capital gains/losses, taxed at ordinary income rates. Holdings over one year qualify for long-term treatment with preferential tax rates (0%, 15%, or 20% depending on your income bracket).

Reporting Exceptions

Brokers don't have to file 1099-B for certain exempt recipients, including corporations (with some exceptions), IRAs, charitable organizations, and sales of money market funds.

Step-by-Step: How to Use Form 1099-B (High Level)

Step 1: Gather All Your 1099-B Forms

If you have multiple brokerage accounts, you'll receive a separate form from each broker. Some brokers consolidate all transactions onto one composite statement.

Step 2: Organize by Category

Group transactions into:

Short-term covered securities (Box 2 checked for short-term, Box 12 checked)
Long-term covered securities (Box 2 checked for long-term, Box 12 checked)
Noncovered securities (Box 5 checked)

Step 3: Transfer Information to Form 8949

For most transactions, you'll report each sale on Form 8949 (Sales and Other Dispositions of Capital Assets). Enter details from your 1099-B:

Column (a): Description of property
Column (b): Date acquired
Column (c): Date sold
Column (d): Proceeds (sales price)
Column (e): Cost basis

Exception: If your broker reported basis to the IRS (Box 12 checked) and you have no adjustments to make, you can sometimes report totals directly on Schedule D without using Form 8949.

Step 4: Make Any Necessary Adjustments

Column (g) on Form 8949 is for adjustments to gain or loss. Common adjustments include:

Wash sale loss adjustments not already reflected in Box 1g
Incorrect cost basis that you need to correct
Nondeductible losses

Step 5: Complete Form 8949 and Carry Totals to Schedule D

Form 8949 calculates your total gains and losses, which then flow to Schedule D (Capital Gains and Losses).

Step 6: Calculate Your Tax

Schedule D determines your overall capital gain or loss, which affects your Form 1040 tax liability.

Common Mistakes and How to Avoid Them

Mistake #1: Forgetting to Report All 1099-B Forms

If the IRS receives a 1099-B with your Social Security number but you don't report it, you'll likely get a CP2000 notice proposing additional tax.
Solution: Keep careful records and ensure you've received forms from all brokers before filing. Wait until mid-February to ensure you have everything.

Mistake #2: Incorrectly Handling Wash Sales

Many taxpayers try to claim losses that were already disallowed by the wash sale rule.
Solution: Your broker calculates wash sales within the same account, but you're responsible for tracking wash sales across different accounts or brokers.

Mistake #3: Using Incorrect Cost Basis

This happens especially with noncovered securities or when you received stock through inheritance, gifts, or employer stock plans.
Solution: Maintain your own records of purchase prices. For inherited stock, your basis is typically the fair market value on the date of the decedent's death.

Mistake #4: Reporting Transactions on the Wrong Line of Schedule D

Mixing short-term and long-term transactions creates tax calculation errors.
Solution: Pay attention to Box 2 on your 1099-B, which tells you whether each transaction is short-term or long-term.

Mistake #5: Double-Counting Transactions

Some taxpayers mistakenly report the same sale on both Form 8949 and Schedule D.
Solution: Generally, every sale goes on Form 8949 first, then totals carry to Schedule D.

Mistake #6: Ignoring Adjustments for Corporate Actions

Stock splits, mergers, and spinoffs affect your cost basis, but may not be correctly reflected on your 1099-B.
Solution: Review your broker's statements carefully and make manual adjustments on Form 8949 if necessary.

What Happens After You File

IRS Matching

The IRS uses automated systems to match the 1099-B information they received from your brokers against what you reported on your tax return. This typically happens 12–18 months after you file.

If Everything Matches

Nothing happens – your return is accepted as filed. The IRS conducts silent processing in the background.

If There's a Discrepancy

You'll receive a CP2000 notice (Notice of Underreported Income) proposing changes to your return.
The notice will:

Explain what information the IRS has that differs from your return
Propose additional tax, penalties, and interest
Give you 30 days to respond

Your Response Options

Agree: Pay the additional amount
Partially agree: Explain which parts you agree/disagree with
Disagree: Provide documentation showing your reporting was correct

Amended Returns

If you discover errors after filing, you can file Form 1040-X to correct them. If you're owed a refund, file within three years of the original return due date.

Statute of Limitations

Generally, the IRS has three years from your filing date to assess additional tax. However, if you substantially underreport income (by more than 25%), this extends to six years.

FAQs

Q1: Do I Need to Report My 1099-B If I Didn't Make Any Money (or Lost Money)?

Yes. You must report all sales of securities regardless of whether you had gains or losses.

Q2: What If My Cost Basis Is Blank or Zero?

This commonly happens with noncovered securities. You're responsible for determining your cost basis using your own records.

Q3: Can I Just Enter the Summary Totals From My Brokerage Statement?

Sometimes. If your 1099-B indicates “Basis reported to IRS” and you have no adjustments, you may report summary totals directly on Schedule D.

Q4: What’s the Difference Between Box 1e and Box 1g?

Box 1e shows your cost basis; Box 1g shows any disallowed wash sale losses.

Q5: I Traded Cryptocurrency in 2024. Where Does It Show?

Some crypto transactions may still appear on Form 1099-B for 2024, but starting in 2025, most will move to Form 1099-DA.

Q6: What If I Receive a Corrected 1099-B After Filing?

If the correction affects your tax liability, file Form 1040-X promptly if you owe more tax, or within three years if you’re owed a refund.

Q7: My Form 1099-B Shows Federal Tax Withheld in Box 4. What Does This Mean?

This is backup withholding. Report it on Schedule 3 (Form 1040), line 17 as federal income tax withheld.

Additional Resources

For more information, visit these official IRS resources:

Disclaimer: This guide provides general information for educational purposes. Tax situations vary, and complex transactions may require professional assistance from a qualified tax advisor or CPA.

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