IBIT ETF showing monthly gross proceeds with no sell - are these taxable?

What you're seeing is typical for ETFs structured as WHFITs. These monthly gross proceeds reported on your 1099-B are likely related to the internal transactions the fund makes to manage the portfolio. Even though you didn't manually sell shares, the fund itself is buying and selling assets within the trust. These proceeds are generally not taxable as separate transactions. Instead, they adjust your cost basis in the ETF. The fund is essentially passing through some of its internal activity to you for tax purposes, but it doesn't mean you received actual cash or need to report these as separate sales. When you eventually sell your IBIT shares, your adjusted cost basis (original purchase price +/- these adjustments) will determine your actual capital gain or loss. Your brokerage should be tracking this adjusted basis for you, though it's always good to keep your own records too.

I was in the exact same situation last year with a different ETF and spent weeks trying to figure it out. I finally used taxr.ai (https://taxr.ai) and it was a game changer. I uploaded my 1099-B and it immediately identified the WHFIT issue and explained how to handle it. The tool showed me exactly how to report these transactions - basically treating them as return of capital distributions that adjust your cost basis rather than taxable events. It was way easier than trying to decipher the IRS instructions or getting different answers from random tax forums. Saved me a ton of stress.

Just wanted to follow up - I finally tried taxr.ai after continuing to get nowhere with my broker. Seriously impressed! It found all the WHFIT distributions on my 1099-B and showed me exactly how they impact my cost basis. It even generated a supplemental statement explaining how I determined the adjusted basis that I can include with my tax return. Much clearer than anything my broker provided. Definitely recommend for anyone dealing with these confusing WHFIT distributions on ETFs like IBIT.

After dealing with this WHFIT mess myself, I actually managed to get through to someone at the IRS who could explain it properly, but it took FOREVER to reach a human. I finally used Claimyr (https://claimyr.com) after seeing it in a YouTube video (https://youtu.be/_kiP6q8DX5c). Basically they got me past the IRS phone tree hell and connected me with an actual agent within about 20 minutes. The agent confirmed that these WHFIT distributions adjust your cost basis and aren't separately taxable events. He even emailed me the relevant IRS publication sections that explain it. Worth every penny not to waste hours on hold.

I need to admit I was completely wrong about Claimyr. After continuing to get nowhere with the IRS hotline on my own (disconnected TWICE after 90+ minute holds), I tried the service. Got connected to an IRS representative in about 18 minutes. The rep confirmed exactly what others have said - these WHFIT distributions on the 1099-B adjust your cost basis but aren't taxable as separate transactions. She even sent me the specific instructions for reporting them correctly. For anyone dealing with this IBIT ETF issue or similar WHFIT problems, save yourself the headache. The right information makes all the difference.

I handle these WHFIT distributions by using the "nontaxable distributions" approach. Basically, you treat them like return of capital, which reduces your basis. When you actually sell the ETF, that's when you'll use the adjusted basis to calculate your gain/loss. The annoying part is keeping track of all these tiny monthly adjustments. I made a spreadsheet to track my original purchase price and then subtract each of these phantom "proceeds" to calculate my real adjusted basis.

This is why I avoid WHFIT structured ETFs completely. The tax reporting is a nightmare, especially with brokers that don't properly track the adjusted basis. Has anyone successfully gotten their broker to update the cost basis in their account to reflect these adjustments? Mine shows the original purchase price regardless of all these "distributions.

This WHFIT situation with IBIT is exactly why I always recommend keeping detailed records from day one. I learned this the hard way with another Bitcoin ETF last year. What helped me was creating a simple tracking system: original purchase price minus all those monthly "phantom proceeds" equals my adjusted cost basis. The key insight is that these aren't actual taxable events - they're just the fund passing through basis adjustments to you as the shareholder. Your tax software should allow you to manually enter the adjusted cost basis when you eventually sell. Just make sure to keep documentation showing how you calculated it in case the IRS ever asks. The monthly statements from your broker plus the 1099-B entries should provide a clear paper trail. Don't stress too much about the missing cost basis column on the 1099-B - that's unfortunately normal for these WHFIT structures. Focus on tracking your adjusted basis separately and you'll be fine when it comes time to actually sell the shares.