Form 1099-B - Cost Basis and Date Acquired (2024)

FAQs

What if 1099-B does not list date acquired? ›

The Form 1099-B that you receive might only report the sale date and sales proceeds. If it does not report the date acquired or cost basis, you still need to enter that information when you report your Form 1099-B in the TaxAct program so that it will transfer to Schedule D and/or Form 8949.

If the cost basis information that is reported on your Form 1099-B is incorrect, you can report a correction to the IRS using Form 8949.

The cost basis reported on Form 1099-B reflects the purchase price only and doesn't account for income reported by your employer, due to IRS regulations. The Supplemental Information Form will show an adjusted cost basis that accounts for the income reported by your employer.

Traders who sell securities purchased prior to the dates listed above may not see cost basis information included on their 1099-B, or it may be incomplete. This doesn't mean the non-covered cost basis isn't reportable; rather, it's not required to be reported by a broker to the IRS.

The broker/1099-B issuer does not know the basis, so you have to enter it. If you do not know the basis, you will need to enter $0, which will maximize what you pay in tax on that transaction. Cost basis is the amount you paid to acquire the security.

Reporting. How many transactions to report on each form. Report each transaction (other than regulated futures, foreign currency, or Section 1256 option contracts) on a separate Form 1099-B.

If you can't make this identification, the IRS says you need to use the first in, first out (FIFO) method. 1 Therefore, if you were to sell 1,500 shares, the first 1,000 shares would be based on the oldest cost basis of $10, followed by 500 shares at the newer cost basis of $5.

A cost basis cannot technically go below zero. A negative basis is theoretically possible if you received non-dividend distributions and designated them all as "Return of Capital" in error. Once the cost basis goes to zero, any additional non-dividend distributions should be designated as Capital Gains.

You can update the actual cost basis for eligible positions in your account. Note: You are responsible for complying with the IRS rules governing these elections. Before you make your decision, you may want to Learn More About Cost Basis Methods and consult with a tax advisor.

To verify the cost basis of a capital asset, you will typically need either original documents, third party evidence or published market data. The details will depend on the specific assets involved, and can get particularly complicated when you're stepping up inherited assets.

What is the cost basis for dummies? ›

At the most basic level, the cost basis of an investment is the total amount originally invested, plus any commissions or fees involved in the purchase. This can either be described in terms of the dollar amount of the investment, or the effective per-share price paid for the investment.

The IRS employs various methods to detect discrepancies in tax reporting, including the absence of 1099 forms. While the IRS does not catch every missing 1099 immediately, their sophisticated systems and data-matching capabilities make it likely that discrepancies will be identified over time.

At a very basic level, the cost basis is the cost of your small business. The basis calculation consists of your financial contributions to the company plus ordinary income and losses minus distributions (like dividends and other payouts).

From within your Form 1099-B, on the screen titled Investment Sales - Transaction Details, click the field below 1b. Date acquired, and type "Various".

If you sold stock, bonds or other securities through a broker or had a barter exchange transaction (exchanged property or services rather than paying cash), you will likely receive a Form 1099-B. Regardless of whether you had a gain, loss, or broke even, you must report these transactions on your tax return.

The software needs a date acquired because it has to be able to calculate whether the sales were short or long term transactions. The capital gains rate is higher for short term (a year or less). If it's blank on your 1099-B, it means the payer didn't have the information (probably because it was "various").

Often, the IRS will recalculate your tax return by including the missing income and determining the amount of tax they think that you owe. This can include penalties and interest. If you realize that you didn't include some income on your tax return, you can file an amended return that includes the missing information.