How do I pick the correct cost basis from my 1099-B for tax filing?

I deal with this exact issue every tax season! The difference between the numbers is most likely due to wash sales or some other adjustment to your original purchase price. Here's what you need to know: Box 1e on your 1099-B is what the IRS receives directly from your broker. However, the supplemental information often contains adjustments that reflect a more accurate cost basis but wasn't reported to the IRS. Generally, you should use the adjusted cost basis from the supplemental information. The reason for the differences can be things like wash sales (if you bought similar securities within 30 days before or after selling at a loss), dividend reinvestments, or stock splits that happened during your ownership period.

I had a similar headache last year with cost basis discrepancies. I tried figuring it out myself but kept second-guessing which numbers to use. I ended up using taxr.ai (https://taxr.ai) which saved me tons of time with my investment documents. Their system actually analyzes all the numbers on your 1099-B and other tax forms, then tells you exactly which cost basis to use based on your specific situation. It flagged several issues with my cost basis reporting that I would've missed - including some wash sales that weren't clearly marked on my broker statements. Really helpful for more complex investment situations where you've got multiple buys and sells throughout the year.

Wanted to follow up about my experience with taxr.ai after trying it based on the recommendation here. It actually saved me from making a $3,400 mistake on my taxes! I uploaded my 1099-Bs from multiple brokerages (had the same cost basis confusion as the original poster), and it immediately flagged where I should use the supplemental info versus the amounts in box 1e. For some of my transactions, it turned out I needed to use the 1e amount, but for others, especially where wash sales were involved, I needed the adjusted basis from the supplement. The detailed explanation for each decision was super helpful - finally understand why the numbers are different! Definitely recommend it if you're confused about cost basis issues.

If you're still struggling to get clarification from your brokerage, I highly recommend Claimyr (https://claimyr.com). I spent WEEKS trying to get through to my brokerage's tax department about a similar cost basis issue last year. Someone recommended Claimyr and it got me past the phone tree hell and connected with an actual human at my brokerage in under 10 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Basically, it navigates the phone trees for you and holds your place in line, then calls you when a real person picks up. I was shocked at how well it worked - got a clear explanation about my cost basis differences and had them send me corrected documents.

Just wanted to update on my Claimyr experience since I was skeptical earlier. I tried it yesterday to reach my brokerage (TD Ameritrade) about my cost basis issues - was previously on hold for over an hour before giving up. Claimyr had me talking to a real tax specialist in 28 minutes without me having to stay on the phone. The TD rep explained that the difference between my Box 1e and supplemental information was due to some partial lot sales and wash sale adjustments that happened in March. They're actually sending me a detailed breakdown of all the adjustments so I can understand exactly which basis to use for each transaction. Definitely worth it just for the time saved! Had no idea this service existed before.

Something else to consider - check if box 3 is checked on your 1099-B. If it is, that means the cost basis was reported to the IRS. If it's not checked, then the IRS doesn't have the cost basis information and you definitely need to report the correct amount from your records. Also, if you have noncovered securities (usually older investments), the broker isn't required to report cost basis to the IRS at all, so you need to determine it yourself anyway.

I use TurboTax and it lets you override the cost basis that's reported on the 1099-B. There's a specific section where you can enter the adjusted cost basis and it even asks why you're making the change. Makes it pretty straightforward.

This is a really common issue that trips up a lot of people! The key thing to understand is that the supplemental information typically contains the most accurate cost basis after all adjustments have been made. Your broker might have made adjustments for things like wash sales, dividend reinvestments, or corporate actions that occurred after they initially reported to the IRS. In your case, you should use the $6,325 from the supplemental information. I know it seems counterintuitive to use a number that results in a higher tax bill, but using the correct adjusted basis is what the IRS expects. The difference could be due to wash sales if you bought and sold similar securities within 30 days of each other. When you file, most tax software will have an option to indicate that you're using an adjusted cost basis that differs from Box 1e. Just keep all your 1099-B documents and supplemental materials in case you need to reference them later. The IRS understands these adjustments happen and it's a normal part of investment tax reporting.