This is issued by brokers or barter exchanges to people who have sold assets during a given tax year. When you sell something for more than it cost you to acquire it, the IRS calls the profit your “capital gain,” and you must pay tax on this amount. The 1099-B form is essentially a record of your sales or trades of certain assets, like stocks, bonds, or commodities. It doesn't directly state your capital gains. Instead, it provides the necessary information for you to calculate them.
It's also important to note that some brokerages provide composite forms that combine your various types of income into one document for simpler reporting. This can include your income from interest (1099-INT), dividends (1099-DIV), and sales or trades of assets (1099-B). You report these under the "Income" section in the filing flow.
Breaking down the boxes:
- Box 1a: Date you sold or disposed of the security.
- Box 1b: Might be filled out with the date you acquired the security. It could be blank for older securities.
- Box 1c: Reserved for future use by the IRS.
- Box 1d: Proceeds or the money you got when you sold the security.
- Box 1e: Cost or other basis, often what you paid for the security. Might be adjusted for various reasons.
- Box 1f: Code if your broker adjusted the basis for reasons other than a wash sale or market discount.
- Box 1g: Amount of any nondeductible loss from a wash sale or the amount of accrued market discount.
- Box 2: Indicates if the gain or loss is long-term (held the security for over a year) or short-term (held for a year or less).
- Box 3: Shows the number of shares sold if the transaction involves stocks.
- Box 4: Federal income tax withheld — Money your broker already sent to the IRS.
- Boxes 5-8: Checked if certain situations apply.
- Box 9-10: Shows the profit or loss on regulated futures or foreign currency contracts.
- Box 11: Shows the aggregate profit or loss on regulated futures or foreign currency contracts.
- Box 12-14: State tax withholding information.