Form 1099-B Cost Basis Checklist
A broker tax form can be the starting point for a capital-gains model, but it is not a substitute for checking proceeds, cost basis, covered or noncovered status, holding period, wash sale adjustments, and Form 8949 reporting boxes. This checklist turns Form 1099-B into a review workflow before the numbers flow into Schedule D or an after-tax investment model.
Last reviewed: June 16, 2026
Four checks before trusting broker tax data
Transaction scope
The IRS says brokers file Form 1099-B for sales of stocks, commodities, regulated futures, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, and similar transactions.
Proceeds first
Form 8949 instructions say proceeds shown on Form 1099-B or substitute statements generally flow to column (d), with corrections handled through the Form 8949 workflow.
Basis status
Form 8949 instructions separate covered securities, noncovered securities, and basis that was or was not reported to the IRS. That distinction changes how a basis correction is entered.
Adjustment match
The IRS Form 8949 instructions use codes and column (g) adjustments for incorrect basis, selling expenses, wash sale losses, and other cases that do not fit a plain proceeds-minus-basis summary.
Form 1099-B review workflow
Confirm why Form 1099-B was issued
The IRS Form 1099-B page says a broker or barter exchange files the form for people for whom it sold stocks and several other listed contracts or instruments for cash, for certain acquisition-of-control or capital-structure events, and for barter exchange transactions.
Open source: IRS about Form 1099-BStart with proceeds, not the broker's gain summary
The Form 8949 instructions say that when a taxpayer receives Form 1099-B, Form 1099-DA, Form 1099-S, or a substitute statement, the proceeds shown on that form or statement are entered in column (d). Model the raw sale before accepting a summary gain number.
Open source: IRS Instructions for Form 8949Separate covered and noncovered securities
The Form 8949 instructions say that if box 5 on Form 1099-B is checked, the property sold was not a covered security. Covered and noncovered status changes how the taxpayer reports basis and corrections.
Open source: IRS Instructions for Form 8949Check whether basis was reported to the IRS
For covered securities, Form 8949 instructions say to enter the basis shown on Form 1099-B in column (e), then use the adjustment workflow if the basis is wrong. For noncovered securities, the correct basis may need to come from taxpayer records when no basis is shown or basis was not reported to the IRS.
Open source: IRS Instructions for Form 8949Reconcile wash sale box 1g before harvesting assumptions
The 2026 Form 1099-B instructions tell brokers to report wash sale loss disallowed in box 1g for same-account, covered-security, same-CUSIP situations, while noting that brokers are permitted but not required to report all disallowed losses. A tax-loss model should therefore still use a wash sale review.
Open source: IRS Instructions for Form 1099-BCarry corrections through Form 8949 and Schedule D
The IRS says Form 8949 reconciles amounts reported to the taxpayer and IRS with the amounts reported on the return, and its subtotals carry to Schedule D where gain or loss is calculated in aggregate.
Open source: IRS about Form 8949
Official sources used
IRS about Form 1099-B
Explains who receives Form 1099-B and the transaction categories brokers and barter exchanges report.
IRS Instructions for Form 1099-B
Explains broker reporting boxes including box 1e cost basis, box 1g wash sale loss disallowed, box 5 noncovered security, and box 6 IRS reporting status.
IRS about Form 8949
Explains the reconciliation role of Form 8949 before Schedule D aggregation.
IRS Instructions for Form 8949
Explains covered and noncovered securities, proceeds, basis, column (f) codes, and column (g) adjustments.
IRS Publication 550
Explains investment income, capital gains and losses, Form 1099-B usage, wash sales, and reporting context.
Form 1099-B FAQ
Can I use Form 1099-B gain or loss totals as my final tax model?
No. Form 1099-B is a source document. Form 8949 instructions still require checking proceeds, basis, covered status, holding period, and any adjustments before the totals reach Schedule D.
What does noncovered security mean for my model?
The Form 8949 instructions say a checked Form 1099-B box 5 means the property was not a covered security. In that case, the correct basis may need to come from your records rather than an IRS-reported basis field.
Does box 1g catch every wash sale?
No. IRS broker instructions require same-account reporting in specific covered-security same-CUSIP situations and allow, but do not require, broader reporting. That is why the wash sale checklist remains separate.
This page is general investor education, not tax advice, filing advice, legal advice, or a recommendation about any tax position. Form 1099-B outcomes can depend on transfer statements, corporate actions, options, gifts, inherited property, market discount, wash sales, noncovered securities, employer equity, digital asset reporting, and taxpayer records.
Continue to the wash sale rule checklist
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