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

what-is-form-1099-b:-proceeds-from-broker-transactions?

Information on the 1099-BIn most cases, a 1099-B form provides information about securities or property involved in a transaction handled by a broker.

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This includes:

A brief description of the item sold, such as “100 shares of XYZ Co”The date you bought or acquired itThe date you sold itHow much it cost you to acquire itHow much you received for it when you sold itWhether your broker withheld any federal taxHow Form 1099-B is usedThe 1099-B helps you deal with capital gains taxes. Usually, when you sell something for more than it cost you to acquire it, the profit is a capital gain, and it may be taxable. On the other hand, if you sell something for less than you paid for it, then you may have a capital loss, which you might be able to use to reduce your taxable capital gains or other income.

You pay capital gains taxes with your income tax return, using Schedule D.The data from Form 1099-B helps you fill out Schedule D and Form 8949 if needed.Short-term and long-term gainsBox 2 of the form tells whether the gain or loss involved is short-term or long-term.

Generally,

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If you owned an asset, such as stock, for a year or less before selling it, any gain or loss from a sale is short-term.If you owned it for more than a year, you would normally have a long-term gain.The distinction is extremely important since tax rates on long-term gains are generally significantly lower than those on short-term gains.Our TurboTax Live experts look out for you. Expert help your way: get help as you go, or hand your taxes off. You can talk live to tax experts online for unlimited answers and advice OR, have a dedicated tax expert do your taxes for you, so you can be confident in your tax return. Enjoy up to an additional $20 off when you get started with TurboTax Live. 

Some brokerage companies issue a “Composite 1099 Form” that replaces multiple individual 1099 forms such as,

1099-B,1099-INT, and1099-DIV.Sometimes, the individual sections of the composite forms do not include all of the information that is available on a standard 1099 form, such as the checkboxes for short-term and long-term transactions on the standard 1099-B form. Instead, many of these composite forms simply group the different types of transactions so that you can readily tell which ones are short-term and long-term.

Barter exchangesA secondary use of Form 1099-B is to report barter exchange transactions. A barter exchange is a network of people or companies who agree to trade property or services with one another without accepting payment in currency.

Barter exchanges use Box 13 of the form to report the fair market value of all goods and services received by an individual member of the exchange over the course of a year. In general, the value received through a barter exchange is considered income and may be taxable.

Whether you have stock, bonds, ETFs, cryptocurrency, rental property income, or other investments, TurboTax Premier has you covered. Filers can easily import up to 10,000 stock transactions from hundreds of Financial Institutions and up to 4,000 crypto transactions from the top crypto exchanges. Increase your tax knowledge and understanding all while doing your taxes.


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