What Is Form 1099-B: Proceeds From Broker and Barter Exchange Transactions?

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What Is Form 1099-B: Proceeds From Broker and Barter Exchange Transactions?

Let me explain Form 1099-B directly: it's the form that brokerages and barter exchanges use to record your gains and losses each year. You need this to figure out your gains and losses on Form 8949, and it's crucial for completing Schedule D on your tax return.

Key Takeaways

Brokers and barter exchanges use Form 1099-B to report your gains and losses to the IRS for the tax year. You transfer that info to Form 8949 to calculate everything, then record it on Schedule D. Brokers have to send you a copy by February 15 so you can include it in your taxes. And remember, each transaction for stocks, options, or commodities gets its own separate Form 1099-B from the broker.

Who Needs to File Form 1099-B?

Brokers send Form 1099-B to the IRS and to every customer who sold investments during the year. This form tracks your gains or losses, and you should receive it by February 15. For instance, if you sold stocks last year and got $10,000 in proceeds, the brokerage reports that to the IRS on a 1099-B, and you report it as a taxable capital gain. Companies in bartering might also file this to report changes in capital structure or stock control. Brokers or barter exchanges must send these forms by February 15 after the tax year—if you don't get yours, contact the issuer for a replacement.

Filing Instructions for Form 1099-B

A brokerage or barter exchange files a separate 1099-B for each sale transaction, including short sales, of securities and contracts. The form includes the issuer's info, your info, a description of the investment, purchase date and price, sale date and price, and the gain or loss. Commissions aren't included since they don't apply here. As a taxpayer, subtract your capital losses from gains to reduce taxable income—there are limits on deductions per year, but you can carry over excesses to future years. The form also reports cash received, fair market value of goods or services, or trade credits from bartering, and you might need to report gains in cash, property, or stock. Each transaction, except regulated futures, foreign currency, or Section 1256 options, goes on its own Form 1099-B.

If you get a 1099-B, you'll need to file Schedule D to record your yearly gains and losses. Use Form 8949 to detail the transactions.

What Is Form 1099-B Used for?

Form 1099-B reports your capital gains and losses from selling assets through brokers and barter exchanges. These firms send separate forms for each transaction to the IRS and to you.

How Do You Report 1099-B on Your Tax Return?

Report the info from Form 1099-B on Schedule D and/or Form 8949 as capital gains or losses.

How Do You Read Form 1099-B?

The form has the issuer's and your information, a description of the sold property, acquisition date, sale date and price, original price, applicable deductions, federal tax withheld, gains or losses, and state tax withholdings.

Do I Have to Report 1099-B on My Taxes?

You don't send the actual 1099-B with your return, but include its info on Form 8949 and send that with Schedule D to record all transaction totals.

Is 1099-B Earned Income?

No, 1099-B covers capital gains and losses from selling assets like stocks or bonds—it's not earned income from employment.

The Bottom Line

Form 1099-B from brokers and barter exchanges reports your capital gains and losses to you and the IRS. You transfer that data to Form 8949 to calculate everything, then report on Schedule D with your tax return. Make sure you include all details to meet your tax obligations and use any capital loss deductions available.

What Is Form 1099-B: Proceeds From Broker and Barter Exchange Transactions?

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