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

The Form 1099-B: Proceeds From Broker and Barter Exchange Transactions is an Internal Revenue Service (IRS) tax form that is issued by brokers or barter exchanges. The form lists the gains or losses of all broker or barter exchange transactions. Brokers and barter exchanges must mail 1099-B forms by January 31.

Who Can File Form 1099-B: Proceeds From Broker and Barter Exchange Transactions?

Brokers must submit this form for each person who sold stocks, options, commodities, and other trading vehicles. The IRS requires the submission of Form 1099-B to function as a record of a taxpayer’s gains or losses associated with the brokered sale or trade of certain securities.

Taxpayers transfer information from Form 1099-B to Form 8949 to calculate preliminary gains and losses. The calculated result is input onto Schedule D of the tax return. For example, assume you sold several stocks within the last year, and the proceeds from the sales of these stocks are $10,000. This $10,000 amount is reported by the brokerage to the IRS on Form 1099-B. As a taxpayer, you will also include this amount as a capital gain when you file your income taxes.

The Form 1099-B must contain details of the investment and include totals. Information includes descriptions of each investment, the purchase date and price, the sale date and price, and associated gains or losses. Commissions paid as part of these transactions are excluded.

Capital losses are subtracted from capital gains and may be used to reduce taxable income reported. There are limits to the amount of capital loss that can be deducted from income each tax year. If the capital loss exceeds the maximum limit, the difference may be carried over to the following tax year.

[Important: Form 1099-B describes activity over a specified period, such as one calendar or tax year. It records the gains or losses that occurred within that time frame.]

How to File Form 1099-B

Report each transaction (other than regulated futures, foreign currency, or Section 1256 option contracts) on a separate Form 1099-B. A broker or barter exchange must file a separate Form 1099-B for whoever has sold (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.

Additional Uses of the Form 1099-B

If a company participates in certain bartering activities with another commercial entity, it is necessary to file a Form 1099-B. It is used to report changes in capital structure or control of a corporation in which you hold stock. The form will contain the cash received and the fair market value of goods or services received or for any trade credits. 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.

Download Form 1099-B: Proceeds From Broker and Barter Exchange Transactions

Here is a link to a downloadable Form 1099-B.

Key Takeaways

  • Brokers must submit this form for each person who sold stocks, options, commodities, and other trading vehicles.
  • Brokers and barter exchanges must mail 1099-B forms by January 31.
  • Report each transaction (other than regulated futures, foreign currency, or Section 1256 option contracts) on a separate Form 1099-B.