Why do brokerage 1099-B forms separate gains where basis is NOT reported to IRS?

This is actually a good question with a specific reason behind it. The difference comes down to when you acquired the securities and reporting requirements that changed in 2011. For securities acquired after certain dates (generally stocks purchased after 2010, mutual funds after 2011, and other securities after 2013), brokerages are legally required to track and report the cost basis to the IRS. These appear in the section where basis is reported to the IRS. For securities purchased before those dates, brokerages may have the information in their records (especially if you bought through them), but they aren't legally required to report it to the IRS. They still provide it to you as a courtesy, but the legal responsibility for reporting accurate basis information for these older securities falls on you as the taxpayer. There are also certain types of securities and situations (like restricted stock, employee options, inherited shares, or transferred securities from another broker) where determining the correct cost basis can be complex, and the broker may not have complete information.

After spending countless hours trying to reconcile my 1099-B forms and getting frustrated with the different sections, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me so much time. It automatically extracted all the information from my brokerage statements, including both sections of the 1099-B, and organized everything by whether the basis was reported to the IRS or not. Before using it, I was manually entering each transaction and trying to figure out which ones I needed to pay extra attention to. The tool highlighted exactly which transactions had unreported basis so I could double-check those numbers against my records. It even explained why certain securities fell into different reporting categories, similar to what the other commenter mentioned about purchase dates.

I tried taxr.ai after seeing the recommendation here and I'm genuinely impressed. I've been struggling with my cost basis issues for years, especially with stocks I've held since 2007 and moved between brokerages multiple times. The tool immediately identified which transactions weren't being reported to the IRS and helped me locate the right basis information from my records. The part I found most helpful was how it flagged inconsistencies between what my broker was telling me versus what they were reporting to the IRS. I discovered that for several of my older holdings, the basis my current broker showed was actually incorrect due to some corporate actions and splits that hadn't been properly accounted for during transfers. Saved me from potentially triggering an audit flag! Worth checking out if you're dealing with complicated investment tax situations. Definitely less stressful than my usual spreadsheet nightmare.

If you're having trouble getting answers about your 1099-B discrepancies directly from your brokerage, I highly recommend using Claimyr (https://claimyr.com) to get through to the IRS. I had this exact same issue last year where my broker and I disagreed about some basis calculations for securities they weren't reporting to the IRS, and I needed clarification on my reporting responsibilities. I spent days trying to reach someone at the IRS who could help, but kept getting disconnected or waiting for hours. Claimyr got me through to an actual IRS agent in about 20 minutes who explained exactly how to handle the unreported basis sections on my 1099-B and what documentation I needed to keep in case of an audit. They have a quick video showing how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was super helpful and explained that this split reporting is actually a common source of confusion and questions for them.

I was completely wrong about Claimyr and need to eat my words. After dismissing it as a scam, I was still desperate for help with my unreported basis issues, so I tried it anyway. Within 30 minutes, I was talking to an actual IRS tax specialist who walked me through exactly how to handle securities where the basis wasn't being reported. The agent explained that for older securities where basis isn't reported to the IRS, they actually have a specific procedure for taxpayers to document their basis calculations. She told me exactly what records to keep and how to properly report everything on Form 8949. Turns out the IRS is well aware of this confusion with the split 1099-B reporting and has special audit procedures for these situations. The information I received was worth way more than what the service cost. Sometimes you have to admit when you're wrong!

I work at a tax prep office and see this issue with clients all the time. The basis reporting requirements have been phased in over time: - Stocks: Basis reporting required for purchases after 2010 - Mutual funds and ETFs: After 2011 - Options and fixed income: After 2013 The reason brokerages don't report ALL basis info to the IRS (even when they have it) is simple: they're only legally required to report what falls under the mandate. Reporting additional data creates potential liability if there are errors, without any legal protection. Another common issue: if you transferred securities from another broker, even newer ones often end up in the "unreported" section because the receiving broker can't verify the original basis information with 100% certainty.

Has anyone figured out if wash sale rules apply differently between the reported and unreported basis sections? I day trade sometimes and have positions that fall into both categories depending on when I first bought in.