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Form 1099-B Explained: Proceeds From Broker Transactions

By The Ledgerism Editorial Team · The Ledgerism Brief Editorial Team produces original, methodology-disclosed accounting and tax research—data trackers, databases, and reference guides built to be the most-cited source in the field. Every figure is verified against primary sources including FASB, the IRS, the PCAOB, NASBA, the AICPA, and state boards of accountancy.

Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, is the tax form your brokerage sends to you and the IRS reporting each security you sold during the year. It lists gross proceeds, and for most sales the cost basis, acquisition and sale dates, and whether the gain or loss is short-term or long-term. You use it to complete Form 8949 and Schedule D. Brokers must furnish it by February 17, 2026 for 2025 sales.

The form matters because the IRS receives a matching copy. If the proceeds you report do not line up with the 1099-B, the automated matching system can flag your return. The trickiest part is cost basis: for some securities the broker reports it to the IRS, and for others the broker does not, which shifts the recordkeeping burden onto you.

What Form 1099-B reports

Form 1099-B reports the sale or exchange of securities handled through a broker: stocks, bonds, ETFs, mutual funds, options, and (starting separately) commodities and regulated futures. Each disposition shows the description, dates, proceeds, and, where required, cost basis and holding period. Barter exchange transactions are reported on the same form.

Brokers issue a 1099-B when you sell a security, close a short position, or have shares redeemed. A buy alone does not trigger it. Reinvested dividends that purchase new shares are not a sale, though they do reset the basis of those new lots for later.

One consolidated 1099 from a brokerage often bundles several forms together: 1099-B, 1099-DIV, 1099-INT, and others. The 1099-B section is the part that feeds capital gains reporting. For a broader look at how basis is built and tracked, see our guide to cost basis and how to calculate it.

The Form 1099-B boxes, line by line

Each box on Form 1099-B maps to a specific field you copy onto Form 8949. Box 1a describes the property and share count. Box 1b is the acquisition date, 1c the sale date, 1d the gross proceeds, and 1e the cost or other basis. Boxes 1f, 1g, and 2 through 12 handle adjustments and classification.

Box 4 shows backup withholding, which a broker applies at 24% when you have not certified your taxpayer identification number. Box 12, when checked, tells you the broker sent your basis to the IRS, which determines the Form 8949 category you use.

Covered vs noncovered securities

A covered security is one for which the broker must report cost basis to the IRS in Box 1e; a noncovered security is one where the broker reports proceeds but not basis, leaving you responsible for supplying and proving the basis. The distinction turns on when you acquired the security, because the reporting rules phased in by asset type.

The rules took effect on staggered dates set by the Emergency Economic Stabilization Act of 2008. Anything you bought before your asset class became covered is noncovered, even if you sell it decades later.

For a covered security, the broker fills in Box 1e and leaves Box 5 unchecked. For a noncovered security, the broker often checks Box 5 and may leave Box 1e blank. You still owe tax on the gain either way, so you must locate your own basis records for noncovered lots. Transferred shares that arrive without basis documentation can also land in the noncovered bucket.

Short-term vs long-term boxes

Box 2 tells you whether a sale is short-term or long-term, which sets the tax rate. Short-term means you held the asset one year or less, and the gain is taxed at ordinary income rates. Long-term means you held it more than one year, and the gain qualifies for preferential rates of 0%, 15%, or 20% depending on income.

The holding period runs from the day after you acquired the security through the day you sold it. Box 1b and Box 1c give the dates the broker used. If Box 2 also flags a portion as ordinary income (common with accrued market discount in Box 1f), that piece is taxed at ordinary rates regardless of holding period.

Getting the classification right matters because the rate gap is large. A high earner might pay 37% on a short-term gain versus 20% on the same dollar of long-term gain. The wash sale rule can also disallow a loss you were counting on, and Box 1g flags the disallowed amount.

How 1099-B data flows to Form 8949 and Schedule D

The numbers on Form 1099-B move onto Form 8949 first, then subtotal onto Schedule D. Form 8949 sorts every sale into one of six categories (Boxes A through F) based on holding period and whether the broker reported basis to the IRS. You then carry the totals to Schedule D, where short-term and long-term nets combine into your overall capital gain or loss.

The six Form 8949 categories:

1. Box A (short-term, basis reported to IRS): sales from a 1099-B with basis in Box 1e and Box 12 checked.
2. Box B (short-term, basis not reported): sales shown on a 1099-B where basis was not reported to the IRS.
3. Box C (short-term, no 1099-B): sales for which you received no broker form.
4. Box D (long-term, basis reported to IRS): the long-term equivalent of Box A.
5. Box E (long-term, basis not reported): the long-term equivalent of Box B.
6. Box F (long-term, no 1099-B): the long-term equivalent of Box C.

If a transaction is covered, needs no basis adjustment, and has no wash sale or other code, you may skip Form 8949 and enter it directly on Schedule D. Everything else, including every noncovered lot where you supply your own basis, generally runs through Form 8949 with an adjustment code and amount. See our detailed walkthrough of Form 8949 box classification and how the totals land on Schedule D.

The 2026 shift to Form 1099-DA for crypto

Starting with the 2025 tax year, digital asset brokers report crypto sales on a new Form 1099-DA, Digital Asset Proceeds From Broker Transactions, rather than folding them into 1099-B. The rules phase in: 2025 sales report gross proceeds only, and 2026 sales add mandatory cost basis reporting.

For 2025 dispositions (forms arriving in early 2026), custodial brokers such as centralized exchanges report proceeds but not basis or acquisition date. For digital assets acquired on or after January 1, 2026 in a custodial account, the broker must also report holding period and basis, making those covered assets. The broker checks Box 9 to flag noncovered digital assets.

A gap remains: an exchange can only report basis for assets it held from purchase through sale. If you moved crypto between wallets or platforms, the receiving broker may lack your original cost, so you still track it yourself. This mirrors the noncovered problem on 1099-B. Our crypto tax accounting guide covers basis methods and the Form 8949 reporting for digital assets in more depth.

Frequently asked questions

When will I receive my Form 1099-B?

Brokers must furnish Form 1099-B (or a consolidated 1099 statement containing it) to you by February 17, 2026 for the 2025 tax year, one month later than the usual January 31 deadline for many other forms. Brokerages often issue corrected 1099-B statements in March when mutual funds or REITs reclassify distributions, so wait for any correction before filing if you can.

What if my Form 1099-B is missing the cost basis?

A blank Box 1e usually means the security is noncovered, so the broker was not required to report basis to the IRS. You must find your own records: purchase confirmations, prior statements, or inheritance and gift valuations. Report the sale on Form 8949 in the Box B or Box E category and enter the basis you can document. Without records, the IRS may treat basis as zero, taxing the full proceeds.

Do I report a 1099-B if I only had a loss?

Yes. A capital loss still must be reported on Form 8949 and Schedule D, and reporting it lets you offset other gains and up to $3,000 of ordinary income per year, with the excess carried forward. Because the IRS receives a matching copy showing your proceeds, skipping a loss sale can still trigger a notice even though you owe no tax on it.

Why does my 1099-B not match my own gain calculation?

Common causes include wash sale adjustments in Box 1g, accrued market discount in Box 1f taxed as ordinary income, missing basis on noncovered lots, or a broker default cost basis method (often first-in, first-out) that differs from the lots you intended to sell. Reconcile lot by lot, and use Form 8949 adjustment codes to correct the broker figure rather than silently changing the number.

Are cryptocurrency sales on Form 1099-B?

No. Beginning with 2025 sales, digital asset dispositions are reported on the separate Form 1099-DA, not Form 1099-B. The 1099-B remains for traditional securities. Both forms feed the same Form 8949 and Schedule D, and both distinguish covered from noncovered positions, but they are issued by different reporting rules on different timelines.

What is a covered security in plain terms?

A covered security is one your broker must report cost basis for to the IRS, so both you and the agency see the same basis figure. It depends on the acquisition date: stocks bought on or after January 1, 2011, mutual fund and DRIP shares on or after January 1, 2012, and most debt and options on or after January 1, 2014. Anything bought earlier is noncovered, and you supply the basis.

Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.

Related guides

• Form 8949
• Form 1099-S Explained
• Form 4797
• Form 3921
• Form 1099-G Explained
• Form 1099-C