When Are 1099-B Forms Required to Be Sent Out?
Learn when 1099-B forms must be sent, who is responsible for issuing them, and key deadlines to ensure accurate tax reporting.
The IRS requires various tax forms to track income and investment activity, including Form 1099-B. This form reports proceeds from brokered transactions, helping taxpayers and the IRS calculate capital gains or losses. Investors who sell stocks, bonds, or other securities will likely receive this document as part of their annual tax reporting.
Types of Transactions Requiring 1099-B
Form 1099-B is issued when an investor sells or exchanges financial assets through a broker. One of the most common cases is the sale of stocks, where the broker reports the gross proceeds. The IRS uses this information to verify capital gains or losses.
Mutual fund redemptions also require a 1099-B. When an investor sells shares in a mutual fund, the brokerage reports the transaction, including the cost basis if available. This is particularly relevant for funds that reinvest dividends, as each reinvestment creates a new tax lot with its own cost basis. Without accurate reporting, investors may miscalculate their taxable gains.
Options trading must also be reported. If an investor sells an options contract or lets it expire worthless, the broker documents the proceeds. The IRS treats expired options as a sale for zero dollars, meaning the entire premium paid becomes a capital loss.
Who Issues the Form
Brokerage firms, investment companies, and financial institutions that facilitate security sales issue Form 1099-B. These entities execute trades on behalf of clients and must report the proceeds to both the taxpayer and the IRS.
Online trading platforms, robo-advisors, and some cryptocurrency exchanges must also issue a 1099-B if they operate as brokers under IRS regulations. The IRS has clarified that certain crypto exchanges fall under the same reporting obligations as stockbrokers.
If multiple brokers are involved in a transaction, the responsibility for issuing the form generally falls on the entity that executed the final sale. In margin trading, where securities are bought and sold using borrowed funds, the broker facilitating the trade reports the proceeds.
General Timeline for Distribution
Brokerages must send Form 1099-B to recipients by February 15, 2025, allowing taxpayers time to incorporate the information into their tax returns before the April filing deadline. The IRS extended this deadline from January 31 to accommodate the complexities of reporting cost basis and other transaction details.
Brokers must also submit the information to the IRS, with electronic filings due by March 31, 2025. If filing on paper, the deadline is February 28. Most large brokerage firms file electronically, making the later deadline more common.
Taxpayers who opt for electronic delivery often receive their forms earlier, with many online brokerage accounts providing access in late January. However, paper copies must still be postmarked by February 15.
Minimum Reporting Threshold
Brokers must issue Form 1099-B for all security sales, regardless of the transaction amount. Unlike tax forms such as 1099-MISC or 1099-NEC, which have dollar-based reporting thresholds, any sale of stocks, bonds, mutual funds, or similar financial instruments must be reported. Even selling a single share of stock worth a few dollars triggers the issuance of the form.
While all sales must be reported, the level of detail on Form 1099-B depends on whether the broker is required to track cost basis. Under the Emergency Economic Stabilization Act of 2008, brokers must report the adjusted cost basis for “covered securities” acquired on or after specific dates—stocks purchased on or after January 1, 2011, and mutual funds or dividend reinvestment plan shares acquired on or after January 1, 2012. For uncovered securities, cost basis reporting is not required, leaving taxpayers responsible for determining their gain or loss.
Situations Requiring Corrections
Errors on Form 1099-B can lead to incorrect tax filings or IRS inquiries. When discrepancies arise, brokers must issue a corrected form. Corrections may be necessary due to misreported proceeds, inaccurate cost basis, or classification errors that affect how gains and losses are calculated. Since the IRS cross-references 1099-B data with tax returns, inconsistencies could prompt a notice or audit.
One common reason for corrections is the misclassification of transactions. If a broker incorrectly reports a short-term sale as long-term, it can significantly impact the taxpayer’s capital gains tax liability. The IRS applies different tax rates depending on the holding period—short-term gains are taxed as ordinary income, while long-term gains benefit from lower rates. Another frequent issue is missing or incorrect cost basis information, which can lead to overstating or understating taxable gains. If a taxpayer notices an error, they should contact their broker immediately to request a corrected form, as brokers must issue an updated version and submit it to the IRS.