Form 1099-B is an IRS form issued by brokers to their customers for tax filing purposes. This form provides investors with information about their transactions made during the past tax year and is used to fill out Schedule D when filing taxes. It requires brokerages to record and report to the IRS all the transactions for stocks, commodities and other securities that were bought and sold during that tax year, as well as any security exchanges or substitutions made in the same transaction.

Form 1099-B itemizes each transaction with specific details including the gross proceeds from the sale and the date of the sale. Costs associated with the sale are not reported, such as custodial fees, management fees, or sales commissions. This form should be issued to the investor by the brokerage by mid-February. Investors should receive the form no later than February 15th, and they can request additional copies from the brokerage.

As of 2013, the IRS changed its rules regarding Form 1099-B to ensure that more accurate information is reported. Brokerage firms must now report individual purchases and sales in separate forms, even if multiple securities were included in a single transaction. This helps the IRS accurately calculate any taxable gains or losses on the individual’s trading activity.

The final step of Form 1099-B is to calculate the net sum total of the transactions. This figure will be used to fill out Schedule D of the investor’s tax form. This figure is the investor’s total taxable gain (or loss) for the year, and must be reported to the IRS.

Form 1099-B is an important IRS form that provides investors with detailed information about their trading activity. It helps the IRS accurately calculate any taxable gains or losses, and must be filed by brokerage firms, as well as exchanges or substitutions. Investors should receive the form by mid-February, and use it to fill out Schedule D when filing their taxes.