What cost basis do I report on the 1099?

The cost basis reported on Form 1099-B reflects the purchase price only and doesn’t account for income reported by your employer, due to IRS regulations. The Supplemental Information Form will show an adjusted cost basis that accounts for the income reported by your employer.

How do I determine my cost basis?

You can calculate your cost basis per share in two ways: Take the original investment amount ($10,000) and divide it by the new number of shares you hold (2,000 shares) to arrive at the new per-share cost basis ($10,000/2,000 = $5).

Where do I find my cost basis on 1099-B?

Each section is included on your Form 1099-B only if it’s relevant to the activity in your account. Short-term transactions for which basis is reported to the IRS. Box 2 is labeled “Short-term,” and Box 12 is labeled “Basis reported to IRS.”

Do I need to report cost basis?

You remain responsible for reporting your cost basis information to the IRS on Form 8949 and on Form 1040, Schedule D, for all shares sold, whether they’re covered or noncovered.

Why is cost basis 0 on my 1099-B?

If you enter “0” as the cost basis, you will owe tax on the entire amount of proceeds (long-term capital gain). If you can make a good-faith estimate on what was paid for the securities you sold, it will lower your tax on the proceeds.

How does the IRS know your cost basis?

You usually get this information on the confirmation statement that the broker sends you after you have purchased a security. You—the taxpayer—are responsible for reporting your cost basis information accurately to the IRS. You do this in most cases by filling out Form 8949.

What do I do if I don’t know my cost basis?

First of all, you should really dig through all your records to try and find the brokerage statements that have your actual cost basis. Try the brokerage firm’s website to see if they have that data or call them to see if it can be provided.

Why is some cost basis not reported to IRS?

Short Term sales with cost basis not reported to the IRS means that they and probably you did not have the cost information listed on your Form 1099-B.