Help understanding cost basis and proceeds on my stocks 1099 form?

So if my proceeds are higher than my cost basis, that means I made money and I'll owe taxes on that difference, right? And what if I've had the stocks for different amounts of time? Does that matter?

Yes, if your proceeds exceed your cost basis, that difference is your capital gain and you would owe taxes on that amount. How much tax you owe depends on how long you held the stocks. The holding period definitely matters for tax purposes. If you owned the stocks for more than a year before selling, it's a long-term capital gain, which typically has lower tax rates (0%, 15%, or 20% depending on your income). If you owned them for a year or less, it's a short-term capital gain, which is taxed at your ordinary income rate - usually higher than long-term rates.

Does it work for more complicated situations? I've got stocks, crypto, and some employee stock options that all have different reporting requirements. Would it handle all of those?

I've tried a few AI tax tools before and they usually miss nuanced details like wash sales or specific lot identification methods. How accurate is this for someone with dozens of trades?

It handles pretty much all investment documents including the more complex situations. I had some wash sales in my report and it correctly identified them and explained how they affected my total gain/loss calculation. For those with dozens of trades, it's actually ideal because it summarizes everything while still letting you drill down into specific transactions if needed. It caught some dividends that were classified incorrectly on my 1099-DIV that would have been taxed at a higher rate.

How does that even work? I thought everyone had to suffer through the hold music. Is this some kind of priority line or something?

Sounds like a scam. If it actually worked, everyone would be using it. The IRS is deliberately understaffed to make it hard to get help - that's just reality.

It's not a priority line - they use a system that monitors hold times and calls you back when an agent is about to answer. You're still in the same queue as everyone else, but their system waits on hold instead of you having to do it. It's definitely not a scam. I was skeptical too, but I was desperate after trying for weeks to get through about a cost basis issue that was causing me to show a huge gain I didn't actually have. The system called me when an agent was ready, and I got my issue resolved in one call. Saved me from overpaying about $2,300 in taxes.

Wait, really? I've been investing for 5 years and never knew this. So if my dividends automatically buy more shares, I need to add those amounts to my original investment when calculating gains/losses?

Exactly! When dividends are automatically reinvested to buy more shares, you've already paid income tax on those dividends in the year you received them. Those reinvested amounts become part of your cost basis. If you don't add them to your cost basis, you'll end up paying tax twice - once when you received the dividend, and again when you sell the shares (because your gain would appear larger than it actually was). This is especially significant for long-term holdings where years of reinvested dividends can substantially increase your true cost basis.

I've been using TaxAct for the last three years and it's pretty good with investments. You can import most 1099-B forms directly or enter them manually. Much cheaper than TurboTax but still gets the job done.