IRS Instruction 1099-B – IRS Forms, Instructions, Pubs 2026

IRS Instruction 1099-B – IRS Forms, Instructions, Pubs 2026 – In the world of tax reporting, Form 1099-B plays a crucial role for brokers, barter exchanges, and certain other entities handling investment transactions. Whether you’re a financial professional navigating sales of stocks, bonds, or digital assets, or an individual taxpayer receiving this form, understanding the IRS instructions for Form 1099-B is essential to ensure compliance and avoid penalties. This comprehensive guide breaks down the 2025 instructions for Form 1099-B, covering everything from filing requirements to recent updates. We’ll draw from official IRS sources to provide accurate, up-to-date information for the 2025 tax year (filed in 2026).

What Is Form 1099-B?

Form 1099-B, titled “Proceeds From Broker and Barter Exchange Transactions,” is an information return used by the IRS to track capital gains and losses from various investment and barter activities. It reports the gross proceeds from sales or dispositions of securities, commodities, and other assets, helping taxpayers accurately complete their Schedule D (Form 1040) for capital gains reporting.

The form includes details like the date of sale, proceeds amount, cost basis (for covered securities), and adjustments for wash sales or market discounts. It’s not filed by individual taxpayers but by brokers or exchanges, who must furnish copies to recipients and the IRS.

Key purposes include:

  • Reporting sales of stocks, bonds, options, futures contracts, and similar instruments.
  • Documenting barter exchanges where property or services are traded.
  • Noting corporate actions like acquisitions or changes in capital structure that result in cash, stock, or property distributions.

For digital assets, note that most are now reported on the new Form 1099-DA, but certain dual-classification assets (e.g., those also qualifying as Section 1256 contracts) may still use Form 1099-B.

Who Must File Form 1099-B?

Not everyone involved in transactions needs to file Form 1099-B—it’s primarily the responsibility of brokers and barter exchanges. According to IRS guidelines, you must file if you are:

  • A broker: This includes anyone who regularly stands ready to effect sales of securities or commodities for others, such as investment firms or platforms handling stock trades.
  • A barter exchange: Organizations facilitating the exchange of goods or services among members.
  • A corporation redeeming its own stock or issuing debt instruments.
  • An entity involved in corporate acquisitions or substantial capital structure changes reported on Form 8806.

Exemptions apply for certain recipients, including corporations, tax-exempt organizations, IRAs, governmental units, and foreign persons. Sales by custodians or trustees reported on Form 1041, or small fractional share sales under $20, may also be exempt.

If you’re unsure, consult the IRS’s definition of a “broker” in the instructions—it’s broader than you might think and includes obligors on debt instruments.

What Transactions Must Be Reported on Form 1099-B?

Form 1099-B covers a wide range of transactions, but not all sales require reporting. Here’s what must be included:

  • Sales of stocks, bonds, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, options, and securities futures contracts for cash.
  • Receipts of cash, stock, or property from corporate acquisitions or capital changes.
  • Barter exchanges of property or services.
  • Short sales (reported when closed, not opened).
  • Dispositions of Qualified Opportunity Fund (QOF) interests.
  • Certain Widely Held Fixed Investment Trust (WHFIT) transactions.

Report each non-aggregated transaction on a separate form. Aggregate reporting is allowed for regulated futures, foreign currency, or Section 1256 option contracts. Separate covered (basis-reported) and noncovered securities.

Do not report:

  • Exempt transactions to charitable organizations or IRAs.
  • Sales of money market funds (unless dual-classified as digital assets).
  • Pure digital asset sales (use Form 1099-DA instead).

There’s no minimum dollar threshold—every qualifying transaction must be reported.

How to Fill Out Form 1099-B: Box-by-Box Instructions?

Filling out Form 1099-B requires precision. Use the following box-by-box guide based on the 2025 instructions. Remember, for 2025, address fields for payers and recipients are now separated into individual boxes (e.g., street, city, state, ZIP).

  • Box 1a: Description of the property (e.g., “100 sh. XYZ Corp.” or details for bartered items).
  • Box 1b: Date acquired (MM/DD/YYYY; leave blank for noncovered securities if Box 5 is checked).
  • Box 1c: Date sold or disposed (trade date for securities; receipt date for bartering).
  • Box 1d: Proceeds (gross amount, less commissions; can be negative for losses).
  • Box 1e: Cost or other basis (adjusted basis for covered securities; blank if noncovered and Box 5 checked).
  • Box 1f: Accrued market discount.
  • Box 1g: Wash sale loss disallowed.
  • Box 2: Check for short-term or long-term gain/loss; mark “Ordinary” if applicable.
  • Box 3: Check if the transaction involves collectibles or QOF.
  • Box 4: Federal income tax withheld (for backup withholding).
  • Box 5: Check if noncovered security (allows omitting basis info).
  • Box 6: Check if gross proceeds less commissions reported to IRS.
  • Box 7: Check if loss not allowed based on substantial identity.
  • Boxes 8-11: For futures/contracts—profit/loss realized, unrealized, and aggregate.
  • Box 12: Check if basis reported to IRS.
  • Box 13: Bartering gross fair market value.
  • Boxes 14-16: Optional state tax information.

For covered securities, basis must be reported accurately. Use multiple forms if needed for aggregated transactions.

Online fillable versions of Copies B, 1, and 2 are available on IRS.gov for convenience.

Filing Deadlines and Requirements for 2025 Form 1099-B

Timely filing is critical. For 2025 transactions (filed in 2026):

  • Furnish statements to recipients (Copy B): February 17, 2026 (adjusted for weekend and Presidents’ Day).
  • File with IRS (Copy A with Form 1096): February 28, 2026, for paper filings; March 31, 2026, for electronic filings.
  • WHFIT statements: March 15, 2026.

Electronic filing is required if you have 10 or more forms (across all 1099 types). Use the IRS FIRE system or authorized e-file providers. Include TINs for all parties and apply backup withholding (28%) if TINs are missing.

For corrections, file void or corrected forms promptly.

Penalties for Non-Compliance with Form 1099-B

Failing to file accurately or on time can result in hefty penalties under IRC Sections 6721 and 6722:

  • Up to $330 per form for late filing (higher for intentional disregard, no annual cap).
  • $60-$130 per form if corrected within certain timeframes.
  • Additional penalties for incorrect basis reporting or missing TINs, even if reporting is optional.

Backup withholding penalties apply separately. Small businesses may qualify for lower rates, but always aim for compliance.

Recent Changes to Form 1099-B for the 2025 Tax Year

The IRS updated Form 1099-B for 2025 with these key changes:

  • Separated address fields: Payer and recipient addresses now have dedicated boxes for street, city, state, ZIP, and country— no more single-line entries.
  • Digital assets shift: Most digital asset transactions move to Form 1099-DA, but WHFITs can choose between 1099-B and 1099-DA. Dual assets (e.g., money market funds) may still use 1099-B.
  • QOF reporting: Dispositions of QOF interests are explicitly reported here, with Box 3 checked.
  • WHFIT enhancements: Includes reporting for non-pro rata partial payments.
  • Online tools: Fillable copies available online; no major form redesign beyond addresses.

These updates aim to improve accuracy and align with new digital asset rules.

Frequently Asked Questions About IRS Form 1099-B

1. What if I receive a 1099-B with incorrect information?

Contact the issuer immediately for a corrected form. Report based on your records, but explain discrepancies on your return.

2. Do I need to report 1099-B information on my taxes?

Yes, use it to complete Schedule D and Form 8949 for capital gains/losses.

3. What’s the difference between covered and noncovered securities?

Covered securities (acquired after specific dates, e.g., stocks after 2010) require basis reporting; noncovered do not, but proceeds are still reported.

4. Can I e-file Form 1099-B?

Yes, and it’s encouraged for efficiency. Use IRS-approved software or services.

5. How does Form 1099-B relate to cryptocurrency?

Pure crypto sales go on 1099-DA, but certain contracts may use 1099-B.

For more FAQs, visit the IRS website or consult a tax professional.

Navigating IRS Form 1099-B doesn’t have to be overwhelming. By following these 2025 instructions, brokers and exchanges can ensure smooth reporting, while recipients can better understand their tax obligations. Always refer to the official IRS publications for personalized advice, and consider consulting a tax expert for complex situations. Stay compliant and make tax season easier!