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IRS Form 1099-B: Proceeds from Broker and Barter Exchange Transactions
Understand IRS Form 1099-B, which reports stock, bond, mutual fund, ETF, and cryptocurrency sales. Learn how to read it and report capital gains accurately.
Learn
Understand IRS Form 1099-B, which reports stock, bond, mutual fund, ETF, and cryptocurrency sales. Learn how to read it and report capital gains accurately.
This guide is designed for first-pass understanding. Start with core terms, then apply the framework in your own account workflow.
IRS Form 1099-B reports proceeds from sales of stocks, bonds, mutual funds, ETFs, and other securities; including cryptocurrency. If you sold any investment during the year, your broker almost certainly sent you one. With the rise of commission-free trading apps, robo-advisors, and crypto exchanges, 1099-B has become one of the most common and most complex tax forms that individual investors encounter.
Form 1099-B has existed in some form since the early days of information reporting, but it underwent a dramatic transformation with the Emergency Economic Stabilization Act of 2008 (the same law that created TARP during the financial crisis). Before this legislation, brokers reported only the proceeds from your sales; the amount you received. They were not required to report your cost basis, which is what you originally paid for the investment. This meant taxpayers had to track their own cost basis, and many did a poor job of it.
Starting in 2011, brokers were required to report cost basis for stocks acquired after a specified date. The requirement was phased in over several years: stocks purchased after January 1, 2011, mutual funds and ETFs acquired after January 1, 2012, and other securities (including bonds and options) acquired after January 1, 2014. Securities purchased before these dates are considered "noncovered"; the broker reports proceeds but not cost basis, and you remain responsible for tracking it yourself.
The rise of commission-free trading platforms like Robinhood, Webull, and others has dramatically increased the volume of 1099-B forms. When trading is free, people trade more. A single active trader can generate hundreds or even thousands of individual transactions in a year, each of which appears as a separate line on the 1099-B. Meanwhile, robo-advisors that perform automatic rebalancing and tax-loss harvesting also generate significant transaction volume.
Form 1099-B is filed by your broker or barter exchange. This includes traditional brokerages like Fidelity, Schwab, and Vanguard, as well as online platforms like Robinhood, E*TRADE, and Interactive Brokers. Cryptocurrency exchanges that are registered with the IRS also issue 1099-B forms for digital asset sales.
Brokers must furnish 1099-B to taxpayers by February 15 of the year following the transactions, though many request extensions that push delivery into late February or even March. This is one reason why investment-heavy tax returns often cannot be filed early in the season. If you have multiple brokerage accounts, you will receive a separate 1099-B from each one.
You report the information from your 1099-B on Schedule D and Form 8949 of your individual tax return. Short-term gains (assets held one year or less) are taxed as ordinary income, while long-term gains (assets held more than one year) receive preferential rates of 0%, 15%, or 20% depending on your income level.
Covered securities are investments purchased after specific dates (2011 for stocks, 2012 for mutual funds/ETFs, 2014 for bonds/options) for which your broker is required to report cost basis to the IRS. Noncovered securities were purchased before those dates, so the broker reports only the sale proceeds — you are responsible for tracking and reporting your own cost basis.
Yes. Every sale or disposition listed on your 1099-B must be reported on Form 8949 and Schedule D. Even if your broker already reported the cost basis to the IRS, you must still include the transactions on your return. If you have hundreds of trades, you can summarize them by category, but every transaction must be accounted for.
Crypto sales are reported on Form 1099-B just like stocks and bonds. Starting in 2025, crypto exchanges are required to issue 1099-B forms. Each sale is reported on Form 8949 with cost basis, proceeds, and holding period. If your exchange does not provide cost basis, you must calculate it yourself using your transaction records.
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IRS Form 8949: Reporting Capital Gains and Losses
A 1099-B can run dozens of pages for active traders. Each transaction gets its own row, and the key columns contain the following information.
Box 1a; Description of property. This identifies what was sold — the stock ticker, number of shares, bond description, or cryptocurrency name. For complex transactions like options, the description may include strike prices and expiration dates.
Box 1b; Date acquired. When you originally purchased the asset. This date determines whether the gain is short-term or long-term. If the broker does not know the acquisition date (common with transferred securities or noncovered shares), this box may be blank.
Box 1c; Date sold or disposed. The date you sold, exchanged, or otherwise disposed of the asset. For cryptocurrency, this includes trading one coin for another, which is a taxable event.
Box 1d; Proceeds. The total amount you received from the sale, before commissions. This is the number the IRS already knows about, so it must match what you report on your return.
Box 1e; Cost or other basis. What you paid for the asset, including commissions at the time of purchase. For covered securities, the broker is required to report this. For noncovered securities, this box may be blank or show $0.00, and you must supply the correct basis yourself.
Box 1f; Accrued market discount. Relevant for bonds purchased at a discount. The discount is generally treated as ordinary income rather than capital gain when the bond is sold or matures.
Box 1g; Wash sale loss disallowed. If the broker detected a wash sale — where you sold a security at a loss and repurchased a substantially identical security within 30 days before or after — the disallowed loss amount appears here. This is one of the most problematic boxes for active traders.
Not reporting noncovered securities correctly. When the broker reports proceeds but not cost basis, the IRS sees only the sale amount. If you fail to report your cost basis on Form 8949, the IRS may assume your basis was zero — meaning they think your entire proceeds are taxable gain. This can result in a notice for thousands of dollars in additional tax.
Overlooking wash sale adjustments. Wash sale rules prevent you from claiming a loss if you buy the same or substantially identical security within a 61-day window (30 days before through 30 days after the sale). While brokers track wash sales within a single account, they cannot track them across multiple accounts. If you sell a stock at a loss in one brokerage account and buy it in another within the wash sale window, the loss is disallowed — but neither broker will flag it. You are responsible for making this adjustment yourself.
Ignoring cryptocurrency transactions. Every crypto-to-crypto trade, not just crypto-to-cash, is a taxable event. Swapping Bitcoin for Ethereum triggers a disposition of Bitcoin that must be reported. Many crypto traders have hundreds of such transactions and fail to report them, which is an increasing audit focus for the IRS.
Double-counting adjustments. If your broker reports a wash sale adjustment in Box 1g and you also make the same adjustment manually on Form 8949, you have double-counted the disallowed loss. Review your 1099-B carefully to understand which adjustments the broker has already made.
The most significant recent development is the expansion of 1099-B reporting to cryptocurrency exchanges. The Infrastructure Investment and Jobs Act of 2021 broadened the definition of "broker" to include digital asset exchanges and platforms. Centralized crypto exchanges are now required to issue 1099-B forms reporting proceeds and, where possible, cost basis for digital asset transactions.
The IRS has also placed increased emphasis on matching 1099-B data with individual returns. Their automated systems compare the proceeds reported by brokers against what appears on your Schedule D and Form 8949. Discrepancies generate CP2000 notices, which propose additional tax. The best defense is accurate reporting that matches your 1099-B exactly, with any necessary adjustments clearly documented on Form 8949.
Clarity connects directly to your brokerage accounts and cryptocurrency exchanges to import your complete transaction history. Every buy, sell, and exchange is tracked with accurate cost basis information using the FIFO (first-in, first-out) method by default, with support for specific identification where applicable.
For active traders, Clarity's wash sale detection scans across all connected accounts — not just one broker at a time. This cross-account visibility catches wash sales that individual brokers miss, helping you avoid costly surprises when the IRS flags a disallowed loss.
The platform also provides a clear breakdown of short-term versus long-term gains, unrealized gains in your current portfolio, and estimated tax liability. When tax season arrives, you can reconcile your 1099-B forms against Clarity's records to ensure nothing is missing or double-counted.
For more details, see the official IRS page for Form 1099-B.
This article is educational and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.
How to report sales of stocks, crypto, and other capital assets on Form 8949. Covers cost basis reporting, wash sales, and how the form flows into Schedule D.