Form 1099-B: Proceeds From Broker and Barter Exchange Transactions (2023)
What the Form Is For
Form 1099-B is an information return that reports the sale of stocks, bonds, mutual funds, and other securities, as well as transactions through barter exchanges. Think of it as a receipt from your broker or barter exchange showing what you sold during the year and how much money changed hands.
If you sold investments in 2023—whether stocks, bonds, commodities, options, or even exchanged goods or services through a barter exchange—your broker or exchange is required to send you this form. The IRS receives a copy too, which means they already know about these transactions when you file your tax return.
The form documents critical information including what you sold, when you sold it, how much you received (gross proceeds), and often the original cost basis. This information is essential for calculating your capital gains or losses—the difference between what you paid for an investment and what you sold it for.
Barter exchanges must also use Form 1099-B to report the fair market value of goods and services you received through bartering, which typically counts as taxable income even though no cash changed hands.
When You’d Use This Form (Including Late and Amended Situations)
Standard Timeline
You should receive your Form 1099-B by February 15, 2024, for transactions that occurred during 2023. Brokers must file these forms with the IRS by the same date if filing electronically (February 28 if filing on paper).
You’re the Recipient
As an investor or barter exchange participant, you don’t file Form 1099-B with the IRS—your broker or exchange does that. Instead, you use the information from your 1099-B to complete Form 8949 (Sales and Other Dispositions of Capital Assets) and Schedule D (Capital Gains and Losses) on your personal tax return.
Late or Missing Forms
If you haven’t received your 1099-B by mid-February, first contact your broker or barter exchange directly. If that doesn’t resolve the issue, you can contact the IRS for assistance. However, you’re still required to report all transactions on your tax return even if you never receive the form—the IRS already has a copy and expects you to report the same information.
Corrected Forms
Sometimes brokers discover errors after sending the original 1099-B. You’ll receive a corrected form marked “CORRECTED” at the top. If this happens after you’ve already filed your tax return, you may need to file an amended return (Form 1040-X) to correct the information. Brokers have up to 3 years to file corrected forms with the IRS if they receive new information about security basis or other details.
Key Rules for 2023
Covered vs. Noncovered Securities
The IRS distinguishes between “covered” and “noncovered” securities. Covered securities are those acquired after certain dates (generally 2011 for stocks, 2012 for mutual funds, 2014 for bonds) for which brokers must report detailed cost basis information. For noncovered securities, brokers may report only the sale proceeds, leaving you responsible for tracking and reporting your original cost.
Short-Term vs. Long-Term
Your holding period matters enormously for taxes. Securities held one year or less generate short-term capital gains taxed at ordinary income rates (up to 37%). Securities held longer than one year qualify for long-term capital gains rates (0%, 15%, or 20% depending on your income). Your 1099-B will indicate which category applies through a code in box 2.
Wash Sale Rules
If you sell a security at a loss and repurchase the same or substantially identical security within 30 days before or after the sale, the IRS disallows the loss under wash sale rules. Your broker will report any disallowed wash sale losses in box 1g, and you cannot deduct them currently—instead, the loss gets added to the cost basis of the replacement security.
No Minimum Threshold
Unlike Form 1099-K which has reporting thresholds, Form 1099-B must be issued for virtually every transaction regardless of amount. Whether you sold $50 or $50,000 worth of stock, you’ll receive a 1099-B (with a few narrow exceptions like fractional shares under $20).
Qualified Opportunity Funds
Special rules apply if you disposed of an interest in a Qualified Opportunity Fund (QOF) in 2023. The form will have the “QOF” box checked in box 3, which triggers additional reporting requirements on your tax return.
Step-by-Step: Understanding Your Form 1099-B (High Level)
Step 1: Gather All Your Forms
You may receive multiple 1099-B forms if you use several brokers or if your transactions include both short-term and long-term sales. Each transaction type typically appears on a separate form. Collect everything before starting your tax return.
Step 2: Review Key Information Boxes
- Box 1a: Describes what you sold (e.g., “100 shares of ABC Corporation common stock”)
- Box 1b: Shows the acquisition date
- Box 1c: Shows the sale date
- Box 1d: Reports gross proceeds
- Box 1e: Reports cost or other basis
- Box 2: Indicates short-term or long-term status
- Box 3: Contains checkboxes for special situations
- Box 5: If checked, indicates a noncovered security
Step 3: Check for Adjustments
Look at boxes 1f (accrued market discount) and 1g (wash sale loss disallowed). These require special handling on Form 8949.
Step 4: Match to Form 8949
The form includes a code (A, B, D, E, or X) telling you which box to check on Form 8949.
Step 5: Transfer to Schedule D
After completing Form 8949, transfer totals to Schedule D to calculate overall capital gain or loss.
Common Mistakes and How to Avoid Them
Mistake #1: Failing to Report Transactions
Some taxpayers mistakenly believe they don’t need to report sales that resulted in losses or broke even. Wrong. The IRS has a copy of every 1099-B and uses automated matching systems to catch unreported transactions.
Mistake #2: Incorrect Cost Basis
If your 1099-B shows an incorrect cost basis, correct it on Form 8949 and attach documentation.
Mistake #3: Missing Wash Sales
If box 1g shows a disallowed loss, you cannot deduct it currently. Instead, it increases the basis in your replacement security.
Mistake #4: Confusing Multiple Form Codes
Different codes (A, B, D, E, X) correspond to different sections of Form 8949—don’t mix them up.
Mistake #5: Ignoring Substitute Statements
Substitute statements from brokers must include all required details; verify before filing.
Mistake #6: Overlooking Barter Income
Barter income (box 13) counts as taxable income even if no cash is exchanged.
What Happens After You File
IRS Matching Process
The IRS matches your reported information against 1099-B forms submitted by brokers.
If Everything Matches
No further action—the IRS processes your return normally.
If There’s a Discrepancy
You may receive a CP2000 Notice, proposing adjustments to your taxes.
Capital Gains Tax Impact
Form 1099-B data flows into Schedule D, impacting your capital gains, losses, and overall tax liability.
State Tax Returns
Most states also require capital gains reporting; verify that your state return matches your federal Schedule D.
Record Retention
Keep your 1099-B and documentation for at least three years after filing.
FAQs
Q1: I sold stock at a loss. Do I still need to report it?
Yes. Even losses must be reported because the IRS received your 1099-B copy. Reporting losses can reduce your taxable income.
Q2: My 1099-B shows a cost basis, but I know it’s wrong. What should I do?
Report the correct basis on Form 8949 and include an adjustment code. Keep documentation proving the correct basis.
Q3: I traded cryptocurrency in 2023. Will I receive a Form 1099-B?
Some exchanges began issuing 1099-Bs in 2023. Whether or not you receive one, you must still report all crypto sales on Form 8949.
Q4: Can I just enter the totals from my 1099-B directly on Schedule D?
In some cases, yes—if basis was reported and no adjustments are needed. Otherwise, itemize on Form 8949.
Q5: What’s the deadline for brokers to send Form 1099-B?
By February 15, 2024. Contact your broker if you haven’t received it by late February.
Q6: I received a corrected 1099-B after filing. What now?
File Form 1040-X if the correction changes your tax outcome. You generally have 3 years to amend.
Q7: Do I report barter transactions differently than investment sales?
Yes. Investment sales go on Form 8949/Schedule D; barter income (box 13) goes on Schedule C (if business) or Schedule 1 (if personal).
Sources:
All information sourced from official IRS publications including the 2023 Instructions for Form 1099-B, About Form 1099-B, and General Instructions for Certain Information Returns.
