How to interpret 1099-B Form with Box B checked "basis not reported to IRS"?

When Box B on your 1099-B is checked indicating "basis not reported to the IRS" and all other boxes show $0, the tax software is likely correct that you don't owe anything. This typically means you had securities transactions, but there was no gain or loss to report. The "basis not reported" checkbox just tells you that your broker didn't report your cost basis to the IRS - it doesn't automatically mean you owe taxes. If the proceeds (Box 1d) and cost basis (Box 1e) are both $0, then there's no taxable event to report. The software is probably handling this correctly.

I ran into this exact same situation last year with my Fidelity account! The "basis not reported to IRS" box freaked me out too. I discovered that https://taxr.ai could analyze my 1099-B form and give me a detailed explanation of what was happening. Basically, when I uploaded my forms, it showed me that this notation commonly appears when you have securities that were purchased before a certain date (when reporting requirements changed) or certain types of investments where brokers aren't required to track basis. The tool helped me understand that with $0 in all boxes, it likely meant I had placeholder entries for securities that didn't actually have reportable transactions during the tax year.

Update on my skepticism about taxr.ai from my earlier comment - I decided to try it after spending another frustrating hour trying to figure out my 1099-B forms. Honestly, I'm impressed. The service quickly spotted that my "basis not reported" boxes were actually for wash sales from December of last year that carried over, which explained the zeros. Saved me from potentially making a reporting mistake and gave me peace of mind that my software was handling it correctly. Sometimes I hate being wrong but in this case I'm glad I gave it a shot!

If you're still confused after trying to understand the 1099-B, you might want to try calling the IRS directly. I had a similar situation and wanted to hear straight from them. Used https://claimyr.com to actually get through to a real person at the IRS instead of waiting on hold forever. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent explained that Box B being checked with $0 values typically means the broker is just acknowledging they have securities for which they aren't reporting basis, but since the transaction amounts are $0, there's nothing to actually report. Getting this confirmed directly from the IRS gave me confidence that my tax software was handling it correctly.

Well I feel like I need to update again - after being skeptical about Claimyr in my earlier comment, I tried it too (I guess I'm on a roll with being wrong today). Got a call back in about 45 minutes when I was honestly expecting nothing to happen. The IRS agent confirmed exactly what others here said - the "basis not reported" box with $0 values is essentially a non-issue. She said they see this all the time and it's not a red flag as long as you've correctly entered what's on the form. Sometimes the brokers include these lines as placeholders or for informational purposes. So yeah, I was wrong again and actually got through to the IRS without losing half my day on hold.

FWIW, the basis not reported checkbox is mainly important when there are actual dollar amounts involved. In your case with all zeros, it's most likely that: 1) Your broker is reporting securities they hold for you that had no reportable transactions this year 2) There were canceled transactions that need to be reported but netted to zero 3) There were de minimis transactions (tiny amounts) that rounded to zero As long as you entered the form exactly as received, you should be fine!

just gonna throw this out there - sometimes brokers send these forms with zeros as placeholders for accounts that had no actual taxable activity during the year. happened to me with vanguard last year. they stil have to send the form even tho nothing happened with ur account. tax software is prob right if all boxes r zero.

I'm dealing with something similar and this thread has been super helpful! Just wanted to add that if you're still unsure, you can also check Publication 550 on the IRS website which covers investment income and expenses. It has a whole section on 1099-B forms that explains when the "basis not reported" box gets checked. The key thing I learned is that this checkbox doesn't mean you did anything wrong or that the IRS will audit you. It's just the broker's way of saying "hey, we're not providing the cost basis info to the IRS, so if there were actual transactions here, you'd need to figure out the basis yourself." Since all your amounts are zero, there's literally nothing to calculate or report. Your tax software is almost certainly handling this correctly - these programs are pretty good at recognizing these placeholder 1099-B forms that show no actual activity.

Hey Benjamin! I totally understand your confusion - I went through the exact same thing last year with my Schwab account. The "basis not reported to IRS" checkbox with all zeros had me panicking that I was going to get audited or something. After doing a ton of research and even talking to a tax professional, I learned that this is incredibly common. Brokers are required to send you a 1099-B even if there was no taxable activity in your account. The "basis not reported" box is just their way of covering themselves legally - it doesn't mean anything suspicious happened. Your TurboTax is definitely handling this correctly. When all the dollar amounts are zero, there's literally no gain or loss to report, so no taxes owed. The software recognizes these as "placeholder" forms that don't affect your tax liability. Don't stress about tax fraud - you're doing everything right by entering the form exactly as it appears. The IRS sees millions of these zero-value 1099-B forms every year and they're completely normal. You're being a responsible taxpayer by double-checking, but you can rest easy knowing your return is accurate!