Tax & regulation
What is Form 1099-B and how do I audit it for brokerage cost-basis discrepancies?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Form 1099-B reports proceeds from broker and barter exchange transactions, including cost basis, sale proceeds, and holding period information used to calculate capital gains or losses for tax filing.
How it works
Investors should cross-check reported cost basis against their own records, since brokers may not always have accurate basis information, especially for transferred securities or complex corporate actions.
An example
If a 1099-B shows an incorrect cost basis after a stock transfer between brokers, the taxpayer may need to adjust the figure using Form 8949 when filing.
Risk & limitations
Errors in cost basis reporting can lead to over- or under-reporting gains; review statements carefully and consult a tax professional for discrepancies. This describes U.S. federal rules only; Canadian and other non-U.S. investors are subject to different tax/regulatory regimes (e.g., CRA rules, TFSA/RRSP treatment) and should consult a local tax professional.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.