Form 1099-B: Proceeds From Broker and Barter Exchange

The Internal Revenue Service (IRS) uses Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, to help you track your investment activity and report capital gains or losses for tax purposes. Brokers and barter exchanges send this form to you and the IRS annually, summarizing your transactions during the tax year.

Who Gets a 1099-B?

You're likely to receive a 1099-B if you engaged in the following activities during the tax year:

A. Sold securities through a broker: This includes stocks, bonds, options, futures contracts, and other investment vehicles.

B. Participated in a barter exchange: If you traded goods or services through a barter platform for non-cash compensation, you'll receive a 1099-B reflecting the fair market value of what you received.

What information does Form 1099-B contain?

The form provides details about the transactions you made and the corresponding tax implications. Here's a breakdown of the key information you'll find:

Broker/Barter Exchange Information: Name, address, and contact details of the institution that facilitated your transactions.

Taxpayer Information: Your Social Security number or Taxpayer Identification Number (TIN).

Transaction Details:

  1. Type of asset sold (stocks, bonds, etc.)
  2. Gross proceeds from the sale of securities
  3. Fair market value of bartered goods or services
  4. Basis reported to the IRS (purchase price of the sold asset) - only if applicable
  5. Description of any other income (dividends, interest, etc.)

Sales Proceeds and Gains/Losses:

  1. Total sale proceeds from all transactions
  2. Indication of whether you had a capital gain or loss (short-term or long-term) from the sale of securities

What to do when you receive Form 1099-B?

A. Verify the information: Carefully review the details on Form 1099-B and compare them with your own records. Report any discrepancies to your broker or barter exchange.

B. Tax implications: Use Form 1099-B to report your capital gains or losses on Schedule D of your tax return.

C. Recordkeeping: Maintain good records of your transactions throughout the year for easy reconciliation with Form 1099-B.