1099-B Form: What It Is and How It Affects Your Taxable Investments

When you sell stocks, bonds, or other investments through a brokerage, the 1099-B form, a tax document issued by brokers to report proceeds from the sale of securities. Also known as Brokerage Transaction and Proceeds Statement, it’s the IRS’s official record of what you sold and for how much. This isn’t just paperwork—it’s the foundation of how you report capital gains or losses on your tax return. If you’ve ever sold shares in a taxable brokerage account, an investment account where you pay taxes on dividends and capital gains each year, you’ve likely received one.

The 1099-B form doesn’t just list sales—it breaks them down by asset type, date bought, date sold, and cost basis. That’s critical because your tax bill depends on whether you held the investment for less than a year (short-term gain, taxed as ordinary income) or more than a year (long-term gain, often taxed at a lower rate). Brokers now report cost basis for most stocks and ETFs, but if you bought shares before 2011 or transferred them from another firm, you might still need to track it yourself. Missing or wrong cost basis means you could overpay taxes—or get flagged by the IRS.

This form ties directly to how you manage capital gains tax, the tax you pay on profit from selling investments. If you’re harvesting losses to offset gains, or if you’re timing sales to stay in a lower tax bracket, the 1099-B is your starting point. It also links to dividend income from taxable investments, assets held outside retirement accounts where earnings are taxed annually. You’ll get a separate 1099-DIV for dividends, but both forms feed into your Schedule D and Form 8949.

Many people ignore the 1099-B until tax season, then panic when they see a mismatch between what their broker says and what they remember. That’s because sales from options, mutual funds, or inherited assets can be tricky. Some brokers bundle multiple trades into one line item. Others don’t include adjustments for wash sales or corporate actions. That’s why reviewing your 1099-B early—before filing—is smarter than waiting for tax software to flag errors.

What you’ll find in the posts below is a practical guide to navigating this form without guesswork. You’ll learn how to read the numbers, spot common mistakes brokers make, and use the data to plan better trades. Whether you’re a beginner with a few stock sales or someone managing a diversified portfolio, the 1099-B is your anchor for accurate, stress-free tax reporting.