What Is Form 1099-B: Proceeds From Broker and Barter Exchange?
The term Form 1099-B: Proceeds from Broker and Barter Exchange refers to an Internal Revenue Service (IRS) tax form used by brokerages and barter exchanges to record customers' gains and losses during a tax year. Individual taxpayers receive the form from their brokers or barter exchange already filled out. Taxpayers transfer the information from a 1099-B to Form 8949 to calculate their preliminary gains and losses. The result is entered onto Schedule D of their tax return.
- Form 1099-B is sent by brokers to their customers for tax filing purposes.
- The form itemizes all transactions made during a tax year.
- Individuals use the information to fill out Schedule D listing their gains and losses for the tax year.
- The sum total is the individual's taxable gain (or loss) for the year.
- Brokerage firms and those that deal in bartering activities must file separate forms even if sales of different securities took place in a single transaction.
Who Can File Form 1099-B: Proceeds From Broker and Barter Exchange?
Brokers must submit a 1099-B form to the IRS and send a copy directly to every customer who sold stocks, options, commodities, or other securities during the tax year. The IRS requires submission of the form to serve as a record of a taxpayer’s gains or losses. Forms are sent to investors in January and February.
For example, let's assume you sold several stocks last year. The proceeds of the sale were $10,000. That figure will be reported to the IRS from two sources: One from the brokerage on a 1099-B and the second from you as a report of a taxable capital gain.
The form may also be filed by companies that participate in certain bartering activities with others. For the latter, the form is used to report changes in capital structure or control of a corporation in which you hold stock.
The broker or barter exchange must mail a copy of a 1099-B form to all clients by Feb. 15 of the year following the tax year. If you don't receive yours, contact the issuer for a replacement copy.
How to File Form 1099-B: Proceeds from Broker and Barter Exchange
A separate Form 1099-B must be filed for every single transaction involving the sale of (including short sales) stocks, commodities, regulated futures contracts, foreign currency contracts (pursuant to a forward contract or regulated futures contract), forward contracts, debt instruments, options, or securities futures contracts.
Information on Form 1099-B includes:
- Issuer's information
- Taxpayer's information
- A description of each investment
- The purchase date and price
- The sale date and price
- The resulting gain or loss
Commissions for these transactions do not apply and are, therefore, excluded from the form.
The form reports the cash received and the fair market value (FMV) of goods or services received or any trade credits received. Taxpayers may be required to report the receipt of gains made during the bartering activity. Reportable gains can be in the form of cash, property, or stock.
As a taxpayer, your capital losses are subtracted from any capital gains and may be used to reduce the taxable income you report. There are limits to the amount of capital loss that can be deducted each tax year. However, if the capital loss exceeds the limit, the difference may be carried over to the following tax year(s).
Download Form 1099-B: Proceeds From Broker and Barter Exchange
All IRS forms, including Form 1099-B, can be downloaded through the agency's website. The link for Form 1099-B can be found here.
Other Relevant Forms
If you receive a 1099-B, you will need to file a Schedule D. This is where you record your gains and losses for the year. Form 8949: Sales and Other Dispositions of Capital Assets is used to record the details of the transactions.
What Is Form 1099-B Used For?
Form 1099-B is used to report capital gains and losses that a taxpayer incurs after selling certain assets through brokerages and barter exchanges. These firms send separate forms for each transaction to both the IRS and the investor.
How Do You Report 1099-B on Your Tax Return?
You must report the information found on Form 1099-B on Schedule D and/or Form 8949 as capital gains or losses.
How Do You Read Form 1099-B?
Issuers include their information and yours on Form 1099-B. It also includes a description of the property sold, the acquisition date, the sale date and price, the original price, and any deductions that apply. Other information includes any federal tax withheld, gains or losses incurred, and state tax withholdings.
Correction—Feb. 16, 2022: This article previously misstated the mailing deadline date for 1099-B forms.