Form 1099-B, Proceeds From Broker and Barter Exchange Transactions (2024)

FAQs

Form 1099-B, Proceeds From Broker and Barter Exchange Transactions? ›

What Is Form 1099-B: Proceeds From Broker and Barter Exchange Transactions? Form 1099-B, Proceeds From Broker and Barter Exchange Transactions is an Internal Revenue Service (IRS) tax form used by brokerages and barter exchanges to record customers' gains and losses during a tax year.

For each sale of a covered security for which you are required to file Form 1099-B, report the date of acquisition (box 1b); whether the gain or loss is short-term or long-term, and whether any portion of the gain or loss is ordinary (box 2); cost or other basis (box 1e); the amount of accrued market discount (box 1f); ...

The sales proceeds figure, as defined in your tax forms, is simply the amount of money you received in exchange for selling your shares this year. The cost basis is the amount of money you paid to purchase the shares that are being sold, with possible adjustments for wash sales and non-dividend distributions.

You receive a Form 1099-B from a broker or barter transaction. The information is generally reported on Form 8949 and/or Schedule D as a capital gain or loss.

Barter transactions are generally fully taxable to both parties to the exchange. That is, the mere fact that the buyer and the seller of property or services choose to make settlement using non-cash consideration does not exempt the transaction from income tax consequences.

The IRS will require a copy of your Form 1099-B if you're reporting your transactions by sales section totals instead of reporting each one separately, and one of the following is true: You made adjustments to your investment income. Your cost basis isn't reported to the IRS.

A 1099-B lists your investment sales activity and what type of transactions they were tax-wise. It also typically notes: When you acquired a security and how much you paid for it (cost basis). When you sold the security and for how much.

Brokerage firms are required to report stock transactions on Form 1099-B. While the brokerage information may contain multiple transactions, they don't necessarily need to be individually entered in the tax return but can be aggregated.

It is very common for the cost basis and sale proceeds amount on your Form 1099 to be quite large. Because of Wealthfront's Tax Loss Harvesting and automatic rebalancing features, your account may see trading volume over the year that far exceeds your account's value at any moment in time.

The information on Form 1099-B includes the gross proceeds from the sale of securities, commodities, options, or futures contracts. The form reports the date of the sale, the type of security or commodity sold, the number of shares or units sold, and the per unit price.

Does 1099 B count as income? ›

The 1099-B helps you deal with capital gains and losses on your tax return. Usually, when you sell something for more than it cost you to acquire it, the profit is a capital gain, and it may be taxable.

A simple example of a barter arrangement is a carpenter who builds a fence for a farmer. Instead of the farmer paying the builder $1,000 in cash for labor and materials, the farmer could instead recompense the carpenter with $1,000 worth of crops or foodstuffs.

Barter is an alternative method of trading where goods and services are exchanged directly for one another without using money as an intermediary. For instance, a farmer may exchange a bushel of wheat for a pair of shoes from a shoemaker.

Generally, you report this income on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040-X, Amended U.S. Individual Income Tax Return.

The Bottom Line

While no money may change hands in bartering transactions, the IRS views bartered goods and services as a form of income and expects them to be reported as such.

A barter transaction happens when you and your vendor exchange goods and services. To record the exchange, you'd enter an invoice and a bill to record the products or services you're exchanging.

If you sold stock, you'll receive Form 1099-B and the Supplemental Information form during the tax season. The information on your 1099-B is reported to the IRS, but the Supplemental Information form includes adjustments to a capital gain or loss necessary to avoid overpaying taxes.

To fill out a 1099 form, you'll need your vendor to fill out and provide you with a W-9 Form, so be sure to request a W-9 from any new vendor you hire. The W-9 provides the requirements you'll need to file a 1099-NEC form properly, including the company's name, address, and taxpayer identification number.