Form 1099-B Instructions: Line-by-Line Filing Guide 2026

Form 1099-B consists of 16 numbered boxes plus payer and recipient identification sections. The form captures transaction details that help taxpayers calculate capital gains and losses. Here is the complete structure:

• Header Section: VOID and CORRECTED checkboxes for form status
• Payer Information: Broker name, address, telephone, and TIN
• Recipient Information: Customer name, address, TIN, and account number
• Boxes 1a-1g: Transaction details including proceeds, cost basis, and dates
• Boxes 2-7: Gain type indicators and special situation checkboxes
• Boxes 8-13: Futures, contracts, and bartering information
• Boxes 14-16: State tax reporting information

The payer section identifies the broker or barter exchange filing the form:

• PAYER'S name: Enter the legal name of the brokerage firm, bank, or barter exchange reporting the transactions
• Street address: The payer's complete mailing address including suite or room number
• City or town, state or province, country, ZIP: Full location details for the payer
• Telephone number: Contact number where recipients can reach the payer with questions
• PAYER'S TIN: The broker's federal Employer Identification Number (EIN). Format: XX-XXXXXXX

Note: The payer information must match exactly what is registered with the IRS. Mismatches can trigger notices or penalties.

The recipient section identifies the customer whose transactions are being reported:

• RECIPIENT'S TIN: The customer's Social Security Number (SSN) or Employer Identification Number (EIN). Format: XXX-XX-XXXX for SSN or XX-XXXXXXX for EIN
• RECIPIENT'S name: The legal name of the individual or entity that owns the account
• Street address: The recipient's current mailing address
• City or town, state or province, country, ZIP: Complete location for the recipient
• Account number: The brokerage account number (optional but recommended for identification)
• CUSIP number: Committee on Uniform Securities Identification Procedures number for the security

Accurate recipient information prevents B-notices from the IRS and ensures proper matching of reported income to tax returns. Always verify the TIN against a valid Form W-9 before filing.

Box 1a describes the security or property sold. Include enough detail to identify the transaction:

• For stocks: Enter the number of shares and company name or ticker symbol. Example: "100 sh. AAPL" or "100 shares Apple Inc."
• For bonds: Include the face amount and issuer. Example: "$10,000 US Treasury Note 2.5% 2028"
• For mutual funds: Enter the number of shares and fund name. Example: "250.543 sh. Vanguard 500 Index"
• For regulated futures: Describe the contract type and quantity
• For barter exchanges: Describe the property or services exchanged

The CUSIP number (if available) provides a unique identifier that helps match transactions. For aggregate reporting of multiple sales of the same security, you may report total shares and indicate "various" for dates.

Enter the date the recipient originally acquired the property. This date determines the holding period and whether gains are short-term or long-term.

• Format: MM/DD/YYYY (e.g., 03/15/2024)
• Multiple acquisition dates: If shares were acquired on different dates and sold together, enter "VARIOUS"
• Inherited property: The acquisition date is typically the decedent's date of death
• Gifted property: Use the donor's original acquisition date (carryover basis rules apply)

Important: For non-covered securities acquired before the applicable dates, you may leave this box blank or enter "N/A" since cost basis reporting is not required.

Enter the trade date when the security was sold or disposed of. For most transactions, this is the date the sale order was executed, not the settlement date.

• Format: MM/DD/YYYY (e.g., 12/31/2025)
• Trade date vs. settlement date: Always use the trade date for tax reporting purposes
• Corporate actions: For mergers or acquisitions, use the date shares were exchanged
• Worthless securities: Use the last day of the tax year the security became worthless

The combination of Box 1b (acquired) and Box 1c (sold) determines the holding period. Securities held more than one year qualify for long-term capital gains treatment.

Report the gross proceeds from the sale before deducting commissions or fees. This is the total amount the customer received for the sale.

• Gross proceeds: The full sale price before any deductions
• Commissions: Do NOT subtract trading commissions from proceeds (these adjust basis instead)
• Short sales: Report the proceeds received when opening the short position
• Options: Report the premium received if the option expired unexercised

Note: If reporting net proceeds (after commissions), check Box 6 to indicate this. The IRS prefers gross proceeds reporting.

For covered securities, report the adjusted cost basis. This is the original purchase price plus adjustments for commissions, fees, and other factors.

• Purchase price: Original amount paid for the security
• Add: Commissions and transaction fees paid at purchase
• Add: Commissions and transaction fees paid at sale
• Adjust for: Stock splits, dividends reinvested, return of capital distributions
• Inherited securities: Typically stepped-up to fair market value at date of death

Leave this box blank for non-covered securities. The taxpayer must determine and report basis themselves. Check Box 5 if the security is non-covered.

For debt instruments purchased at a discount, report the portion of accrued market discount included in income. This applies primarily to bonds purchased below face value in the secondary market.

• Market discount: The difference between the bond's face value and purchase price
• Accrual methods: Can be calculated using ratable accrual or constant yield method
• Election: Taxpayers can elect to include market discount in income annually or at disposition

Most stock transactions will have this box blank. It primarily applies to bond traders and fixed-income investors.

Report the amount of loss disallowed due to wash sale rules. A wash sale occurs when you sell a security at a loss and repurchase the same or substantially identical security within 30 days before or after the sale.

• 30-day window: Applies to purchases 30 days before through 30 days after the sale
• Substantially identical: Includes the same stock, options on the same stock, or similar securities
• Disallowed loss: Added to the basis of the replacement shares
• Broker tracking: Brokers track wash sales within the same account but may not track across accounts or institutions

Important: Taxpayers must track wash sales across all their accounts, including IRAs and spouse's accounts. Brokers only report what they can observe within their own systems.

Check the appropriate box to indicate whether the transaction resulted in a short-term or long-term gain or loss:

• Short-term: Held one year or less. Taxed at ordinary income rates (10% to 37%)
• Long-term: Held more than one year. Taxed at preferential rates (0%, 15%, or 20%)
• Ordinary: Check if ordinary treatment applies (e.g., certain debt instruments)

The holding period begins the day after acquisition and includes the day of sale. This classification flows to Form 8949, which has separate sections for short-term and long-term transactions.

These checkboxes indicate special reporting situations:

• Box 3: If checked, proceeds from collectibles: Check if the sale involves collectibles (art, antiques, gems, metals, stamps). Collectibles have a maximum 28% capital gains rate.
• Box 4: Federal income tax withheld: Enter any backup withholding collected. Backup withholding rate is currently 24%.
• Box 5: If checked, noncovered security: Check if the security is non-covered and basis is not reported to the IRS. The taxpayer must determine and report their own basis.

Backup withholding applies when the recipient failed to provide a valid TIN or the IRS notified the payer to withhold due to underreporting.

Additional checkboxes for reporting method and loss limitations:

• Box 6: Reported to IRS - Gross proceeds / Net proceeds: Indicates whether Box 1d shows gross proceeds or net proceeds after commissions. Most brokers report gross proceeds.
• Box 7: If checked, loss is not allowed based on amount in 1d: Check if the reported loss may not be fully deductible. This applies to certain wash sales or related party transactions where the full loss cannot be claimed.

These boxes apply to regulated futures contracts, foreign currency contracts, and Section 1256 options:

• Box 8: Profit or (loss) realized in current year on closed contracts: Net gain or loss from contracts closed during the tax year
• Box 9: Unrealized profit or (loss) on open contracts - 12/31 of previous year: Mark-to-market value of open positions at prior year-end
• Box 10: Unrealized profit or (loss) on open contracts - 12/31 of current year: Mark-to-market value of open positions at current year-end
• Box 11: Aggregate profit or (loss) on contracts: Combined result that flows to Form 6781

Section 1256 contracts receive special tax treatment with a 60/40 split: 60% is treated as long-term capital gain regardless of holding period, and 40% as short-term.

For transactions through barter exchanges:

• Box 12: If checked, basis reported to IRS: Indicates whether cost basis information was provided to the IRS for barter transactions
• Box 13: Bartering: Check this box if the transaction involved bartering (exchange of property or services without cash)

Barter exchanges must report the fair market value of goods or services received. This income is taxable even though no cash changed hands. The recipient must report the fair market value as income on their tax return.

State reporting information for filers participating in the Combined Federal/State Filing Program:

• Box 14: State name: Two-letter state abbreviation (e.g., CA, NY, TX)
• Box 15: State identification no.: The payer's state tax identification number
• Box 16: State tax withheld: Amount of state income tax withheld from the transaction, if any

Not all states participate in the Combined Federal/State Filing Program. Check with your state tax authority for specific filing requirements. For a complete list of deadlines, see our Form 1099-B Filing Deadlines.

Understanding the distinction between covered and non-covered securities is critical for accurate Form 1099-B reporting:

• Covered securities require brokers to report cost basis to the IRS. The broker tracks and adjusts basis for splits, dividends, and other corporate actions.
• Non-covered securities only require proceeds reporting. Taxpayers must track and report their own cost basis.

Securities became covered based on these acquisition dates:

• January 1, 2011: Stock (except mutual funds and DRIPs)
• January 1, 2012: Mutual fund shares and dividend reinvestment plan (DRIP) shares
• January 1, 2014: Options, less complex debt instruments
• January 1, 2016: More complex debt instruments

Brokers may use different methods to determine which shares were sold when reporting cost basis:

• FIFO (First In, First Out): Default method. Oldest shares are sold first.
• Specific Identification: Customer specifies which exact shares to sell. Must be designated at time of sale.
• Average Cost: Available for mutual fund shares. Averages the cost of all shares owned.
• LIFO (Last In, First Out): Most recently purchased shares are sold first.
• Highest Cost: Shares with highest cost basis are sold first, minimizing gains.
• Lowest Cost: Shares with lowest cost basis are sold first, maximizing gains.

Customers should select a cost basis method with their broker before selling. The chosen method affects both the reported gain/loss and the tax liability.

Avoid these frequent errors when completing Form 1099-B:

• Incorrect TINs: Always verify recipient TINs against a current W-9 before filing
• Missing cost basis: For covered securities, cost basis must be reported. Verify your records before filing.
• Wrong proceeds type: Ensure Box 6 correctly indicates gross vs. net proceeds
• Incomplete wash sale tracking: Track wash sales across all customer accounts at your institution
• Incorrect holding period: Double-check acquisition dates to ensure proper short-term/long-term classification
• Missing state information: Include state boxes for states that require 1099-B filing

The IRS imposes penalties for late, incorrect, or missing Form 1099-B filings. Penalty amounts for 2026 tax year returns:

• Filed within 30 days of due date: $60 per form (max $664,500 per year)
• Filed after 30 days but by August 1: $130 per form (max $1,993,500 per year)
• Filed after August 1 or not filed: $330 per form (max $3,987,000 per year)
• Intentional disregard: $660 per form with no maximum limit

Small businesses (gross receipts of $5 million or less) have lower maximum penalties. To avoid penalties, file on time and ensure all information is accurate. For deadline information, see our Form 1099-B Due Dates page.