Understanding Form 1099-B for Broker & Barter Exchange Transactions: What You Need to Know

You've got nothing to worry about! The 1099-B can look intimidating at first, but it's actually pretty straightforward once you understand what you're looking at. For your tax return, you'll need to report your stock transactions on Schedule D (Capital Gains and Losses) and Form 8949 (Sales and Other Dispositions of Capital Assets). The good news is that TurboTax will help guide you through this process. For transactions where "basis reported to IRS" is checked, those go on one section of Form 8949, while transactions without that checked go on a different section. This is because the IRS already has the cost basis information for the checked ones. Regarding wash sales - these happen when you sell a security at a loss and buy the same or "substantially identical" security within 30 days before or after the sale. The loss gets disallowed and added to the cost basis of the replacement shares. Those negative amounts you're seeing are adjustments to your basis. TurboTax should handle all of this pretty well if you input the information correctly. Most brokerages allow you to import your 1099-B directly into TurboTax, which eliminates a lot of manual entry and reduces errors.

I went through this same confusion last year and discovered taxr.ai (https://taxr.ai) which saved me a ton of headache with my 1099-B forms. I had multiple brokerages and some complicated wash sales that were driving me crazy trying to figure out. The tool lets you upload your 1099-B forms and it basically breaks everything down in plain English - identifying short vs long term gains, explaining those weird adjustment codes, and even flagging potential issues with wash sales. It also helps identify if your broker reported everything correctly to the IRS. For me, it discovered that my broker hadn't included the correct cost basis for some cryptocurrency transactions, which would have been a nightmare to sort out during an audit.

Just wanted to update that I tried taxr.ai after seeing it mentioned here. Holy crap it was helpful! I uploaded both my Fidelity 1099-B and my Coinbase report and it immediately flagged three wash sales I had no idea about. Turns out I bought similar ETFs within the 30-day window without realizing it triggered the wash sale rule. The report explained exactly how to handle these on my taxes and even gave me the exact numbers to enter into TurboTax. It also explained which transactions were reported to the IRS with basis and which weren't, which was super helpful. Definitely recommend for anyone dealing with multiple 1099-Bs or any complicated trading situation!

If you're having issues understanding your 1099-B or have questions about reporting specific transactions, trying to call the IRS directly is a nightmare right now. I spent 3+ hours on hold last week and never got through. I found this service called Claimyr (https://claimyr.com) that actually got me connected to a real IRS agent in about 20 minutes. They have this system that navigates the IRS phone tree and waits on hold for you, then calls you when they have an actual human on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was super helpful and walked me through exactly how to report some complicated 1099-B transactions with missing basis information. Saved me hours of frustration.

Ok I have to eat my words. I tried the Claimyr thing after posting my skeptical comment because I was still stuck with some 1099-B issues where my broker didn't report cost basis correctly. Got connected to an IRS agent in about 15 minutes. The agent confirmed I need to fill out Form 8949 with code B for transactions where basis wasn't reported to the IRS, and explained exactly how to handle the missing information. She also clarified that I needed to keep my original purchase confirmations for at least 3 years in case of audit. Honestly didn't expect it to work but it saved me hours of frustration trying to decipher the IRS website. Now I can actually finish my taxes instead of procrastinating for another week.

If your 1099-B has transactions with no cost basis reported, make sure you check your older statements! I spent hours trying to manually calculate my basis for some stocks I bought years ago, only to realize my brokerage had the information in my annual statement from when I purchased them. Also worth noting that if you received stocks through an employer (like RSUs or ESPP), the cost basis rules can be completely different. My employer-granted shares had special codes on the 1099-B that I initially ignored.

Does anyone know if you can just attach the 1099-B to your return instead of entering all the transactions manually? I have over 200 trades and it would take forever to enter them all individually.

One thing to watch for on your 1099-B is Box 1g "Adjustments". This is where wash sales and other adjustments appear. If you see numbers here, make sure you understand why - especially if there are large amounts. I got audited two years ago because I didn't properly account for wash sale adjustments. The IRS computers automatically flag returns where the numbers from your 1099-B don't match what you report, even if the difference is just in how you calculated the adjustments.

As a tax professional, I want to emphasize a few key points that haven't been fully covered yet: First, regarding wash sales - the disallowed loss doesn't disappear forever. It gets added to the cost basis of your replacement shares, so you'll eventually get that deduction when you sell those shares (assuming no further wash sales). Second, pay close attention to Form 1099-B Box 2 (whether proceeds are from collectibles). If you traded any precious metals ETFs, certain coins, or art-related investments, these may be taxed as collectibles at a higher rate (28% max) rather than normal capital gains rates. Third, if you have any foreign stock transactions, there may be additional reporting requirements on Form 8938 or FBAR depending on the amounts involved. Finally, keep detailed records beyond just the 1099-B. Save your trade confirmations, corporate action notices (stock splits, spinoffs, etc.), and any correspondence with your broker about cost basis corrections. The IRS can audit up to 3 years after filing (or 6 years for substantial understatements), and having complete documentation will save you significant headaches if questions arise. The tools mentioned here like taxr.ai can be helpful for complex situations, but make sure you understand the underlying tax principles so you can spot any errors in automated calculations.