Form 1099-B, Form 8949 and Schedule D

Form 1099-B

Financial institutions report sales of investment property to the IRS and their clients on Form 1099-B, Proceeds From Broker and Barter Exchange Transactions or a substitute statement. Form 1099-B may show either gross proceeds or net proceeds.

Gross proceeds:

If gross proceeds and selling expenses are separately stated on Form 1099-B, include on Schedule D the gross proceeds amount in column (d) and add the selling expenses to the cost basis in column (e).

Net proceeds:

If only net proceeds are reported on Form 1099-B, report the net amount as the sales price in column (d) of Schedule D.

Do not include selling expenses in column (e).

Form 8949

List Form 1099-B transactions on Form 8949 before completing Schedule D.

Form 8949 provides two sections:

One section for reporting short-term capital gains, and
another section for reporting long-term capital gains

In addition, in each section of Form 8949, you must check one of three boxes (Box A, B, or C).

Pace a checkmark in Box A if the broker reported the basis of your capital asset transaction(s).
Place a checkmark in Box B if the broker did not report basis.
Place a checkmark in Box C if you had capital asset transactions that were not reported to you on Form 1099-B or substitute statement

Keep in mind, you checkmark only one of the three boxes shown in Part 1 and Part II of Form 8949.

You May Have to Prepare More than One Form 8949:

If the cost or other basis of securities you've sold is not reported on Form 1099-B, in other words, box 3 is blank, you must use a separate Form 8949 to list these types of transactions.

Substitute Statement

If instead of Form 1099-B for each individual transaction, you receive a substitute statement showing multiple transactions, the broker will indicate on the substitute statement whether basis for a transaction was reported to the IRS or was not reported to the IRS.

You must complete a separate Form 8949 to cover each of the three situations described above.

In other words...

if you have transactions where basis was reported, these transactions go on one Form 8949.
if you have transactions where basis was not reported, these transactions go on a separate Form 8949.
and if you had capital asset transactions for which you did not received Form 1099-B (or substitute statement), you must list these transactions on a another Form 8949.
Therefore, if you had all three situations, you would filed three Forms 8949.

Example:

You receive a Form 1099-B substitute statement showing multiple transactions:

A Short-term gain with basis reported
A Long-term gain with basis reported
A long-term loss with basis not reported

For these transactions you need two Forms 8949: one to report the two transactions with basis reported by the broker to the IRS. And a second Form 8949 to report the transaction where no basis was reported to the IRS.

If you had gains and losses from capital transactions that were not reported to you on Form 1099-B, you would have to prepare another Form 8949 to report such transactions.

Schedule D

Use Schedule D For the Following:

Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains
- Form 6252 or Part I, Installment Sale Income
- Form 4797, Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2))
To report a gain or loss from:
- Form 4684, Casualties and Thefts
- Form 6781, Gains and Losses From Section 1256 Contracts and Straddles
- Form 8824, Like-Kind Exchanges (and section 1043 conflict-of-interest sales)
To report a gain or loss from a partnership, S corporation, estate or trust
To report a capital loss carryover from 2010 to 2011
To report capital gain distributions not reported directly on Form 1040 (or effectively connected capital gain distributions not reported directly on Form 1040NR, line 14)

Capital Gains and Losses