Form 1099-B Tax Year 2013 Filing Checklist
Overview and Context
Form 1099-B for tax year 2013 reports broker and barter exchange transaction proceeds following the cost basis reporting framework established in prior years. The form emphasizes noncovered securities tracking through Box 6 and wash sale loss disallowance reporting in Box 5, applying cost basis rules that brokers must follow when reporting covered securities.
No stimulus reconciliation programs, Affordable Care Act shared responsibility payments, Tax Cuts and Jobs Act provisions, or energy credit redesigns apply to the 2013 Form 1099-B. The form continues to distinguish between covered securities, which require complete basis reporting, and non-covered securities, where recipients must maintain their own cost basis records.
Foreign Recipients and Withholding Requirements
Nonresident aliens receiving proceeds reported on Form 1099-B may trigger federal withholding obligations under Publication 515. When brokers know or have reason to know that a recipient is a nonresident alien, they may be required to withhold federal income tax and file Form 1042-S instead of or in addition to Form 1099-B.
These withholding rules operate under different provisions than standard backup withholding and require careful attention to tax treaty provisions and exemptions that may apply to foreign recipients.
Key Form Changes for 2013
Box 6 Noncovered Security Designation
Box 6 provides a checkbox to indicate noncovered securities, which include stock purchased before January 1, 2011, most mutual fund stock purchased before January 1, 2012, and dividend reinvestment plan stock transferred before January 1, 2012.
When Box 6 is checked, boxes 1b, 3, 5, and 8 may be left blank because brokers are not required to report acquisition dates, cost basis, wash sale adjustments, or holding period classifications for noncovered securities. Recipients must obtain basic information from their own records and refer to Schedule D and the instructions in Publication 550 for proper reporting.
Regulated Futures Contract Reporting
Boxes 10 through 13 provide enhanced clarity for regulated futures and foreign currency contract results. Box 10 shows profit or loss realized on contracts closed during 2013. Box 11 displays the year-end adjustment for contracts that were open as of December 31, 2012, reconciling the prior year's mark-to-market treatment with actual results. Box 12 shows unrealized profit or loss on contracts still held on December 31, 2013, which are treated as closed on that date for tax reporting purposes.
Box 13 aggregates all three amounts to produce the total profit or loss that recipients must report on Form 6781. These boxes link closing adjustments from one year to opening adjustments in the following year, ensuring consistent treatment of positions held across calendar years.
Ten-Step Recipient Checklist
Step 1: Obtain and Verify Forms
Obtain all Copy B recipient Forms 1099-B from brokers and barter exchanges by February 18, 2014. Verify that your name, taxpayer identification number, and account number match your records. The form may show only the last four digits of your identification number for privacy protection, though the complete number appears on Copy A filed with the IRS. Cross-reference the CUSIP number or security symbol shown on the form with your investment statements to ensure you can identify each transaction accurately.
Step 2: Review Noncovered Security Status
Examine Box 6 on each form to determine non-covered security status. When Box 6 is checked, the broker does not report the cost basis in Box 3 because the security qualifies as non-covered under the 2013 basis tracking rules. Noncovered securities include stock purchased before January 1, 2011, and most mutual fund stock purchased before January 1, 2012.
For these securities, you must obtain cost basis documentation from your own purchase records, brokerage statements, and confirmation slips. Maintain organized files with purchase dates, shares acquired, prices paid, and all adjustments from corporate actions to substantiate your basis calculations.
Step 3: Verify Holding Period Classification
Review Box 8, which shows whether a gain or loss is short-term or long-term based on the holding period. Securities held one year or less generate short-term capital gains or losses, while securities held more than one year produce long-term gains or losses. Check Box 1b for the acquisition date that determines this classification. If Box 6 is checked, indicating a non-covered security status, Box 1b and Box 8 may be blank, requiring you to determine the holding period from your own records. Confirm that your acquisition records support the classification shown or calculate the proper classification when the broker has not provided it.
Step 4: Identify Wash Sale Adjustments
Examine Box 5 carefully for wash sale loss disallowances. When an amount appears in Box 5, you cannot deduct that loss on your 2013 tax return because you purchased substantially identical securities within 30 days before or after the sale that generated the loss. Do not report the disallowed loss amount on Form 8949 or Schedule D. Instead, the disallowed loss increases the basis of the replacement securities you acquired.
Refer to Schedule D instructions and Publication 550 for comprehensive wash sale rules and examples that show how to adjust the basis for replacement securities. Note that brokers may not identify all wash sales, particularly those involving multiple accounts or different brokers, so you must review your complete trading activity to identify additional wash sales.
Step 5: Record Gross Proceeds
Review Box 2, which shows gross proceeds from the transaction. The form indicates through checkboxes whether the reported amount represents gross proceeds or gross proceeds less commissions and option premiums. Understanding which method the broker used helps you report the transaction correctly on Form 8949 or Schedule D. The checkbox marked determines whether you need to separately account for commissions or whether they are already reflected in the reported proceeds. Report the amount shown in Box 2 on your tax return as instructed, ensuring consistency with the broker’s IRS filing to avoid discrepancies that trigger IRS notices.
Step 6: Check Loss Disallowance Status
Review Box 15, which serves as a checkbox indicating that loss is not allowed based on the amount reported in Box 2. When Box 15 is checked, typically in connection with reportable changes in corporate control or capital structure, you cannot report this loss on Form 8949 or Schedule D.
Obtain a separate statement from your broker identifying which specific losses are nondeductible and explaining the corporate action that caused the disallowance. These situations often involve complex reorganizations where tax law prohibits loss recognition despite an apparent economic loss.
Step 7: Report Federal Tax Withholding
Check Box 4 for federal income tax withheld through backup withholding. Include any amount shown in Box 4 as tax withheld on your 2013 Form 1040. Backup withholding applies when you fail to furnish a proper taxpayer identification number to the payer using Form W-9 or when the IRS notifies the broker of identification number problems. The backup withholding rate for 2013 is 28 percent. Resolving identification number issues with your broker prevents future backup withholding and ensures proper credit for amounts already withheld.
Step 8: Report Regulated Futures Contracts
For regulated futures contracts and foreign currency contracts, review Boxes 10 through 13 carefully. Box 10 shows profit or loss on contracts you closed during 2013. Box 11 shows the adjustment for open contracts as of December 31, 2012, reconciling the prior year's mark-to-market amount with actual results upon those contracts' closure or marking to market in 2013. Box 12 shows unrealized profit or loss on contracts you still held on December 31, 2013, which are treated as closed on that date for tax purposes.
Box 13 aggregates these three amounts to show your total profit or loss. Report the Box 13 amount on Form 6781, where these contracts receive special tax treatment with 60 percent of gain or loss classified as long-term and 40 percent as short-term, regardless of how long you actually held the positions.
Step 9: Record State Tax Withholding
Review the information on state tax withholding shown in Boxes 16 and 17. Box 16 shows state income tax withheld from the transaction proceeds. Include this amount on your state tax return as tax withheld, following your state’s specific reporting requirements. Box 17 shows the state identification number or payer’s state identification number. Reference your state’s guidance for proper reporting of Box 16 amounts, as states have varying rules for crediting withholding from securities transactions against state income tax liability.
Step 10: Report Bartering Income
Check Box 14 for bartering income. If you received proceeds through barter exchanges, Box 14 shows the fair market value of cash, property, services, or trade credits you received. This amount represents taxable ordinary income that must be reported even though you may not have received cash.
Capital losses from unrelated securities transactions cannot offset bartering income. Report barter income according to Publication 525 guidance, coordinating with Schedule C if you are self-employed or other applicable schedules based on the nature of the bartered services or property.
Step 11: Compile and File
Attach Copy B of Form 1099-B to your paper return if filing by mail, or retain it with your records if filing electronically. Compile all Forms 1099-B and use the information to complete Schedule D or Form 8949 when preparing your tax return. Ensure that all transactions are properly classified as either short-term or long-term, and that the proceeds and basis amounts match the forms received. Sign and date your completed return. Consult the IRS Where to File page to determine the correct mailing address for your return based on your state of residence and whether you are enclosing payment.
Form-Specific Limitations
Nonresident Alien Considerations
Nonresident alien recipients face special limitations and requirements. When the payer knows or has reason to know you are a nonresident alien, the payer may withhold federal income tax and file Form 1042-S under Publication 515 rules rather than following standard Form 1099-B procedures.
You cannot reduce certain gains or losses based on personal tax status using Form 1099-B alone. Treaty provisions may affect withholding rates and reporting requirements, requiring coordination between Form 1099-B and Form 1042-S when both apply to your situation.
Barter Exchange Coordination
Barter exchange transactions reported in Box 14 require careful coordination with other tax reporting schedules. The fair market value of property or services received through barter represents taxable income in the year received. You cannot offset barter income with capital losses from unrelated securities transactions shown on the same or different Forms 1099-B.
Self-employed individuals who receive barter income must report it on Schedule C, along with related business expenses. Individuals receiving barter income from non-business activities report it as other income on Form 1040. Publication 525 provides detailed guidance on characterizing and reporting various types of barter transactions. This checklist provides comprehensive guidance for recipients of 2013 Form 1099-B on how to properly report broker and barter exchange transactions on their federal income tax returns.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
