Form 1099-B: Proceeds from Broker and Barter Exchange Transactions
Definition: Form 1099-B is an IRS information return issued by brokers or barter exchanges to report proceeds from the sale of securities (stocks, bonds, mutual funds, options), commodities, or barter transactions. It includes gross proceeds, cost basis (if reported), wash sale adjustments, and whether short/long-term—helping calculate capital gains/losses.
Why It Matters: Proceeds aren’t profit—subtract basis for actual gain/loss on Schedule D (Form 1040). Short-term (held ≤1 year) taxed as ordinary income; long-term at 0–20%. Missing basis, wash sales, or mismatches trigger CP2000 notices, audits, or inflated tax bills. If a 1099-B has overstated gains or led to IRS debt from market volatility, Omni Tax Help reconciles trade confirmations, adjusts basis (step-up, improvements), claims losses/carryovers, and amends returns—minimizing tax, harvesting losses, and resolving disputes quickly.
Key Boxes:
- Box 1a–1d: Description, proceeds, date acquired/sold.
- Box 2: Type of gain/loss (short/long).
- Box 4/5: Federal withholding; wash sale loss disallowed.
What to Do Next:
- Gather all trade statements—report on Form 8949/Schedule D.
- Use Form 8949 for basis adjustments or corrections.