Form 1099 B is one of the many 1099s by the IRS that businesses need to issue for voluntary tax compliances in the USA. This form is also known as Proceeds from Broker and Barter Exchange. As the name itself suggests, this form reports the transactions handled by brokers.
This form records the capital gains and losses of the taxpayer recipient who receives the form from their broker or barter exchange dealers. The deadline of receiving the form is February 15.
Who Files this Form and How?
The broker or barter exchange files Form 1099 B to their customers for whom they have sold stocks and commodities; regulated future contracts, contracts in foreign currencies; forward contracts, securities future contracts, debt instruments, etc. in return for cash. Also, this form is issued to all those individuals who have received cash, property, or stock from a corporation which makes a significant change in the acquisition control, and to individuals who have exchanged services or property in the barter exchange manner.
Every single transaction needs to be reported in separate 1099 B forms. The form includes information of the issuer, information of the taxpayer, description of the investment, the purchase price and date of purchase, the sales price and date of sale, and the gain or loss occurred.
Remember, that the commissions on these transactions are excluded from the form.
1099 B’s Usage and Other Relevant Forms
As mentioned above, Form 1099 B reports the assets purchased or sold by individuals through brokers or barter exchange systems. These forms are, then, required to report the capital gains and losses. The issuing firms send the copies of this form to the recipient, IRS, and the investors for compliances and better business knowledge.
Moreover, if one receives the Form 1099 B, then they must fill out Schedule D to record the gains and losses throughout the year. One must also fill out Form 8949, also known as Sales and Other Dispositions of Capital Assets, to record the transaction details.
How to Read and Report it on a Tax Return?
The form includes information of the issuer, the taxpayer, description of the sold property, the acquisition and sale dates as well as prices, and deduction of any kind that applies. Other than this, the form can also include the information regarding the federal tax withheld, state tax withholdings, and gains or losses made.
The information reported on the Form 1099 B must also be reported in Schedule D and Form 8949 during the filing of tax return under the capital gains or losses.
Hoping that this article has answered most of your questions, we can finally say that you can move ahead with the process of issuing or filing Form 1099-B. However, in case of any further concerns you can reach out to our experts.
Also, if your firm is incorporated in Delaware, then you must also check Delaware Franchise Tax – A Guide and Common FAQs to know about one of the mandates to do business from Delaware.
Written by – Priyanka Rampal
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