Form 1099-B - Cost Basis and Date Acquired (2024)

FAQs

Form 1099-B - Cost Basis and Date Acquired? ›

The Cost or Other Basis is generally the cost you paid for the property, plus purchase commissions, recording or transfer fees, and any improvements, minus depreciation, amortization, and depletion. The Date Acquired is generally the date you acquired the asset (or the trade date).

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); ...

Since the law passed, brokers are required to report cost basis information on Form 1099-B and to the IRS after the sale of certain securities, including stocks, bonds, options, exchange-traded funds, and mutual funds.

If the cost basis information that is reported on your Form 1099-B is incorrect, you can report a correction to the IRS using Form 8949.

A 1099-B is an informational document brokers send to people who have sold securities, such as stocks or bonds, through a brokerage during the year. It outlines which securities were sold and categorizes them based on tax type to help investors make sense of their capital gains or losses.

Related Definitions

DATE ACQUIRED means the date you obtained ownership of the asset.

It is the box category you check on form 8949 that determines the holding period that applies. you can enter keyword various for date acquired.

The bottom line is that the IRS expects you to maintain records that identify the cost basis of your securities. If you don't have adequate records, you might have to rely on the cost basis that your brokerage firm reports—or you may be required to treat the cost basis as zero, which could mean owing more in taxes.

The IRS expects taxpayers to keep the original documentation for capital assets, such as real estate and investments. It uses these documents, along with third-party records, bank statements and published market data, to verify the cost basis of assets.

Cost basis is the price you paid to purchase a security plus any additional costs such as broker's fees or commissions. When you sell a security, your tax liability is determined by how much you spent to buy the security (cost basis) and your sales price.

What happens if cost basis is not reported to IRS? ›

If you do not report your cost basis to the IRS, the IRS considers your securities to have been sold at a 100% capital gain, which can result in a higher tax liability.

If a stock you held was part of a corporate action such as a merger, acquisition, or divestiture during the year, the resulting security may have missing cost basis.

You must report the information found on Form 1099-B on Schedule D and/or Form 8949 as capital gains or losses.

How can we help? The Form 1099-B that you receive might only report the sale date and sales proceeds. If it does not report the date acquired or cost basis, you still need to enter that information when you report your Form 1099-B in the TaxAct program so that it will transfer to Schedule D and/or Form 8949.

The cost basis reported on Form 1099-B reflects the purchase price only and doesn't account for income reported by your employer, due to IRS regulations. • The Supplemental Information Form will show an adjusted cost basis that accounts for the income reported by your employer.

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.

The acquisition date is the date on which the acquirer obtains control of the acquiree, which is generally the closing date. However, if control of the acquiree transfers to the acquirer through a written agreement, the acquisition date can be before or after the closing date.

For most purposes, the tax law relies on the trade date and ignores the settlement date — but there are exceptions.

1099-MISC

The form will report payments like rents, prizes and awards. Clients have to send the forms to recipients by January 31st or February 15th if the forms also include data in boxes 8 or 10. The taxpayers have to file the forms by February 28th for mail filing, and March 31st is the filing deadline for E-filing.

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.