1099-B: How to handle transactions where cost basis NOT reported to the IRS? I'm confused about broker reporting!

You're dealing with a common situation. For transactions where the cost basis wasn't reported to the IRS, you'll need to calculate and report the cost basis yourself on your tax return. This typically happens with older stocks purchased before mandatory cost basis reporting took effect, or with certain types of securities. Here's what you should do: When you enter the 1099-B information in TurboTax, it will ask if cost basis was reported to the IRS. Select "No" and then enter the cost basis from your records. You'll use Schedule D and Form 8949 with code "B" in column (f) to indicate that cost basis wasn't reported to the IRS. Keep those purchase confirmations! While you don't need to send them with your return, you should keep them in your tax records for at least 7 years in case of an audit. The IRS expects you to report the correct basis regardless of what was or wasn't reported by your broker.

I went through this exact headache last year with some old stocks my grandpa left me. I spent HOURS trying to figure out the right cost basis until I found this tool called taxr.ai (https://taxr.ai) that totally saved me. They have this feature where you can upload your old statements and 1099-B forms, and it helps calculate the correct cost basis for those "not reported to IRS" transactions. It was super helpful because it tracks all those adjustments like stock splits, reinvested dividends, return of capital distributions, etc. that I would have definitely messed up on my own. Their system flagged exactly which transactions needed the "B" code on Form 8949 too, which made filing way less stressful.

Just wanted to update after trying taxr.ai based on the recommendation here. It actually worked incredibly well for my situation! I had about 12 transactions with missing cost basis data, and the system was able to help me establish reasonable cost basis for all of them by using historical pricing data. What really impressed me was that it flagged a stock split I completely forgot about from 2016 that would have messed up my calculations. It also generated a complete Form 8949 with all the proper adjustment codes that I could just attach to my return. Definitely worth it for anyone dealing with "cost basis not reported to IRS" situations or complicated investment histories.

If you're trying to contact the IRS to ask questions about this cost basis reporting issue, good luck getting through! I spent 3.5 hours on hold last week trying to speak to someone. Finally discovered this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 20 minutes instead of the usual hold time nightmare. They have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c I needed to clarify some questions about Form 8949 codes for unreported basis transactions similar to what you're dealing with, and the IRS agent was actually super helpful once I got through. Claimyr basically holds your place in line and calls you when an agent picks up. Saved me from wasting an entire afternoon on hold.

I need to apologize to Profile 9 about my skepticism regarding Claimyr. After my frustrating comment, I decided to try it myself since I had been unable to reach the IRS about a similar cost basis issue for weeks. I honestly couldn't believe it, but I got connected to an IRS agent in about 25 minutes yesterday after trying unsuccessfully on my own for days. The agent walked me through exactly how to report transactions with unreported cost basis on Form 8949, including which adjustment codes to use for my specific situation. She even explained that I needed to split my reporting between Box A and Box B transactions. This solved the exact problem I was having with my 1099-B reporting. Sometimes you have to admit when you're wrong, and I was definitely wrong about this service!

Just want to add that you should check if your broker has any historical statements available online. I was in a similar situation with some old Vanguard shares, and I discovered they have an archive section where I could access statements going back 10 years. I was able to find my original purchase confirmations there even though they weren't calculating the basis for IRS reporting purposes.

Has anyone dealt with employee stock purchase plans (ESPP) where the cost basis wasn't reported correctly? My 1099-B shows the purchase price but not the discount I received, which I know affects the cost basis and how it's taxed.

Great discussion here! I wanted to add one more point about record-keeping that might help others. If you're missing purchase records for older stocks, don't forget to check if you have old tax returns from the years when you received dividends. Sometimes the dividend statements attached to those returns will show the number of shares you owned, which can help you piece together your purchase history. Also, for anyone using tax software like TurboTax, make sure you're entering these transactions in the right section. The software will automatically generate the proper Form 8949 codes, but you need to specifically tell it that cost basis was NOT reported to the IRS for each transaction. Otherwise, it might not apply the correct reporting codes, and that could cause issues if the IRS notices a discrepancy between what your broker reported and what you're claiming as basis. One last tip: if you have really complex situations with multiple transactions over many years, consider working with a tax professional for at least the first year. They can help you set up a system for tracking this stuff going forward, and it's often worth the cost to avoid potential audit issues down the road.

This thread has been incredibly helpful! I'm dealing with a similar situation where I have some old mutual fund shares from 2018 that I sold last year, and the 1099-B shows "cost basis not reported to IRS." One thing I wanted to add that might help others - if you're missing records but remember approximately when you made regular monthly investments, you can often reconstruct your purchase history by looking at your bank statements from those years. I found my old statements showed regular transfers to my investment account, and combined with the fund's historical NAV data, I was able to calculate a reasonable cost basis for each purchase. Also, don't forget about any fees or commissions you paid when originally purchasing the securities - those can be added to your cost basis too. For mutual funds, this might include any front-end loads or purchase fees that weren't reinvested. The advice about keeping detailed records going forward is so important. I've started downloading and saving PDF copies of all my investment statements quarterly now, plus keeping a simple spreadsheet that tracks purchases, reinvested dividends, and any corporate actions like splits. It's a small effort now that could save hours of headaches later!

I'm dealing with this exact issue right now! I have some old Apple stock from 2017 that I sold in 2024, and my 1099-B clearly shows "cost basis not reported to IRS." Reading through all these responses has been so helpful - I had no idea about using code "B" on Form 8949 or that I needed to be so careful about how I input this in TurboTax. One question I have after reading through everything: if I have stock that went through multiple splits over the years (Apple had several splits since 2017), do I need to adjust my original cost basis for those splits when calculating my basis, or does the sale price on the 1099-B already account for the splits? I'm worried about double-adjusting and messing up my calculations. Also, thanks to everyone who mentioned taxr.ai and Claimyr - I might need to try one of those services since I'm finding this more complicated than I initially thought. The peace of mind seems worth it, especially after reading about people getting IRS notices for not handling this correctly the first time around.

This has been such a comprehensive discussion! I'm currently dealing with a similar cost basis reporting issue with some old ETF shares, and reading through everyone's experiences and solutions has been incredibly valuable. One additional resource I wanted to mention that helped me: if you're working with really old securities, sometimes contacting the transfer agent directly can help you locate historical records. For example, Computershare handles a lot of major companies and they sometimes have purchase records going back further than your broker does. You'll need your SSN and approximate purchase timeframes, but they can often provide documentation of your original transactions. Also, I learned the hard way that if you're dealing with securities that had corporate actions beyond just stock splits - like spin-offs, mergers, or return of capital distributions - these can significantly affect your cost basis calculations. The IRS has specific rules for how to handle each type of corporate action, and getting it wrong can be costly. If you have any of these more complex situations, it's definitely worth consulting with a tax professional or using one of the specialized tools mentioned here like taxr.ai. Thanks to everyone who shared their experiences and solutions - this community is incredibly helpful for navigating these tricky tax situations!

This thread has been incredibly informative! As someone who just discovered I have unreported cost basis issues with some old Roth IRA conversions from 2020, I wanted to add one more potential resource that might help others. If you're dealing with retirement account transactions (traditional to Roth conversions, in-kind distributions, etc.), your 1099-R might not show the correct cost basis for securities that were transferred. In my case, I had some individual stocks in my traditional IRA that got transferred to my Roth during conversion, and the 1099-R only shows the fair market value at conversion, not my original basis in those securities. For these situations, you typically need to go back to your IRA custodian's records from when you originally purchased the securities within the IRA. Some custodians like Fidelity and Vanguard have really good historical record-keeping, while others (especially smaller ones) might require you to dig through old statements. Also wanted to echo what others have said about keeping meticulous records going forward. After dealing with this headache, I now download and save PDF copies of every single transaction confirmation, plus I keep a simple Google Sheet that tracks every purchase, sale, dividend reinvestment, and corporate action across all my accounts. It takes maybe 10 minutes per month but could save hours of reconstruction work later. Thanks to everyone who shared their experiences and the various tools like taxr.ai and Claimyr - this community really helps make these complex tax situations more manageable!

Reading through this entire discussion has been incredibly eye-opening! I'm dealing with a similar situation with some old Microsoft stock from 2018 that I inherited and finally sold last year. The 1099-B clearly shows "cost basis not reported to IRS" and I've been stressing about how to handle it correctly. What I found particularly helpful from everyone's advice is the emphasis on using Form 8949 with code "B" and keeping detailed documentation. I actually still have the estate paperwork that shows the stepped-up basis value from when I inherited the shares, so I think I'm in better shape than I initially thought. One thing I wanted to add that might help others with inherited securities: make sure you're using the stepped-up basis from the date of death, not the original purchase price that the deceased person paid. The IRS allows this step-up in basis for inherited assets, which can significantly reduce your taxable gain. In my case, the shares were worth much more when my grandmother passed than when she originally bought them, so this rule saves me thousands in taxes. For anyone dealing with inherited stock where the estate didn't provide clear basis documentation, you can usually get the date-of-death value by looking up historical stock prices for that specific date. Most financial websites have this data going back many years. Thanks to everyone who shared their experiences and the various tools and services - this thread has been incredibly valuable for navigating these complex reporting requirements!

This entire thread has been incredibly helpful! I'm dealing with a similar situation where I sold some old mutual fund shares from 2019, and my 1099-B shows "cost basis not reported to IRS" for several transactions. After reading through everyone's experiences, I feel much more confident about how to handle this properly. A few key takeaways that really stood out to me: 1. Using Form 8949 with code "B" for unreported basis transactions 2. The importance of including reinvested dividends in your cost basis calculation 3. Keeping detailed documentation even though you don't submit it with your return 4. Being extra careful with tax software settings to ensure proper reporting One thing I wanted to add that might help others - if you have old mutual fund statements, don't overlook the annual summary statements that many fund companies send in January. These often include a complete transaction history for the prior year, including all purchases, sales, and reinvested dividends. I found mine buried in my email archives and they had all the detail I needed to reconstruct my cost basis accurately. Thanks to everyone who shared their experiences with tools like taxr.ai and services like Claimyr. For those of us dealing with complex situations or missing records, having these resources available makes the whole process much less daunting. The peace of mind seems definitely worth the cost, especially after reading about people getting IRS notices for incorrect reporting. This community is amazing for helping navigate these tricky tax situations!

This has been such a comprehensive and helpful discussion! I'm actually in a very similar situation to the original poster - I have some old stock positions from 2018-2019 that I sold last year, and several of them show "cost basis not reported to IRS" on my 1099-B forms. Reading through everyone's experiences and advice has been incredibly valuable. The step-by-step guidance about using Form 8949 with code "B", the importance of including reinvested dividends in basis calculations, and all the practical tips for reconstructing missing records have given me so much more confidence about handling this correctly. I'm particularly grateful for the mentions of specialized tools and services - as someone who's been dreading this part of my tax preparation, knowing there are resources like taxr.ai for complex calculations and services like Claimyr for actually getting through to the IRS when needed makes the whole process feel much more manageable. One small thing I wanted to add: for anyone using online brokers, don't forget to check if they have a "tax center" or "tax documents" section that might have additional cost basis information beyond what's on the 1099-B. Some brokers provide supplementary worksheets or detailed transaction histories in these sections that can help fill in gaps, even if the official 1099-B doesn't include the basis data. Thanks to everyone who shared their experiences and solutions - this community discussion has turned what seemed like a daunting tax problem into something I now feel equipped to handle properly!

This thread has been absolutely incredible - I can't believe how much valuable information everyone has shared! I'm dealing with almost the exact same situation as the original poster. I sold some tech stocks last year that I bought back in 2020, and several transactions on my 1099-B show "cost basis not reported to IRS." What really helped me understand the process was the clear explanation about using Form 8949 with code "B" and how TurboTax handles these entries. I had no idea I needed to specifically tell the software that cost basis wasn't reported - that seems like such a critical detail that could easily be missed. The discussion about reinvested dividends was eye-opening too. I definitely have DRIP transactions over the years that I need to account for in my basis calculation. It's amazing how these "small" details can add up to significant adjustments. One question I have after reading through everything: if I have multiple sales of the same stock throughout 2024, but only some of them show "cost basis not reported to IRS" (because I bought shares at different times), do I need to report each sale separately on Form 8949, or can I somehow combine them? I'm using TurboTax and want to make sure I'm handling this correctly. Thanks to everyone who shared their experiences with the various tools and services mentioned. For someone like me who's been putting off dealing with this because it seemed so complicated, this discussion has made it feel much more manageable!

This discussion has been a lifesaver! I'm in a very similar situation with some old Amazon stock I purchased in 2019 and sold in 2024. My 1099-B clearly shows "cost basis not reported to IRS" and I've been stressing about it for weeks. After reading through all the advice here, I feel so much more confident about handling this properly. The explanation about Form 8949 with code "B" was exactly what I needed to understand. I had no idea there were specific codes for different reporting situations. One thing that's been particularly helpful is learning about all the adjustments I need to make to my cost basis calculation. I definitely had some dividend reinvestments over the years that I need to account for, plus I remember there was a stock split in 2022 that I'll need to factor in. The recommendations for taxr.ai and Claimyr are really appealing given how complex this is getting. For someone like me who wants to make sure everything is done correctly the first time, the peace of mind seems worth the cost. Thank you to everyone who shared their experiences and solutions - this community has turned what felt like an overwhelming tax problem into something I now feel equipped to handle!