1099-B: How to Report Stock Sales and Calculate Capital Gains

What Is Form 1099-B?

Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) reports every sale of stocks, bonds, ETFs, mutual fund shares, options, and other securities made in your taxable brokerage account during the year. Your broker sends one to you and one to the IRS — the IRS expects your tax return to match.

For active investors with many trades, 1099-B can run dozens of pages. Modern brokerages produce a "consolidated 1099" combining 1099-B, 1099-DIV, and 1099-INT in one document.

The Key Columns on Your 1099-B

Description of Property

What was sold — typically stock ticker, number of shares, and often the CUSIP identifier. Verify each line matches a trade you actually made.

Date Acquired and Date Sold

These two dates determine short-term vs. long-term treatment. More than 1 year between acquire and sell = long-term (lower rates). 1 year or less = short-term (ordinary income rates).

Proceeds

What you received from the sale — gross proceeds net of commissions in most cases. This matches what flows to Schedule D as sales price.

Cost Basis (Box 1e)

What you originally paid for the shares — the most important number for calculating your gain or loss. Brokers are required to report basis for "covered" securities (purchased after January 1, 2011 for stocks). For "noncovered" securities (older positions, some options), Box 1e may be blank and you must track basis yourself.

Gain or Loss

Proceeds minus cost basis. Positive = gain (taxable). Negative = loss (deductible against gains, then up to $3,000 against ordinary income).

Adjustment Codes (Box 1f)

Important codes that modify the reported gain/loss:

• W: Wash sale loss disallowed — you sold at a loss and bought the same stock within 30 days. The loss is not currently deductible; it's added to the basis of the repurchased shares.
• H: Gain from exercise of incentive stock options (ISO) — special AMT treatment
• N: Basis is not reported to IRS (noncovered security)

Covered vs. Noncovered Securities

This distinction is critical for how you file:

• Covered (Box 6 checked): Basis reported to IRS. Your Schedule D must match the 1099-B amounts exactly — deviations trigger IRS notices.
• Noncovered (Box 6 not checked): Basis not reported to IRS. You provide the basis. You can use any allowable method (FIFO, specific identification, average cost for mutual funds).

The Wash Sale Problem

The wash sale rule disallows a loss when you sell a security at a loss and buy the same or substantially identical security within 30 days before or after the sale. The 1099-B flags these with adjustment code W and shows the disallowed loss amount.

Disallowed wash sale losses are added to the basis of the repurchased shares — the loss isn't permanently lost, just deferred until you sell the replacement shares outside the wash sale window.

Reporting 1099-B on Your Return

Every sale on your 1099-B flows to Schedule D. Your tax software will guide you through entering each 1099-B — or you can import the 1099-B electronically from your brokerage directly into most tax software.

Totals from Schedule D feed to Form 1040 Line 7. Net short-term gains are taxed as ordinary income; net long-term gains get preferential rates.

Parse Your 1099-B and Consolidated 1099

Upload your consolidated 1099 to 1099parser.com to extract all 1099-B transactions, 1099-DIV, and 1099-INT data into structured format — ready for tax prep software import or manual Schedule D preparation.