# Understanding Form 1099-B: Broker and Barter Transactions Explained

![Form 1099-B: A tax form used by brokerages and barter exchanges to record customers' gains and losses during a tax year.](https://www.investopedia.com/thmb/KMRFbBac4k7vMwgh-wBuYegXGqo=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/form-1099-b.asp-final-1248911001ae4988af1ce6fc62ece795.png)

*— Investopedia / Theresa Chiechi*

## What Is Form 1099-B: Proceeds From Broker and Barter Exchange Transactions?

Form 1099-B, used by brokerages and barter exchanges, records taxpayer gains and losses annually. It helps taxpayers calculate gains and losses via Form 8949 and is essential for completing Schedule D on their tax returns.

### Key Takeaways

*   Form 1099-B is used by brokers and barter exchanges to report a taxpayer's gains and losses to the IRS for the tax year.
*   Taxpayers transfer information from Form 1099-B to Form 8949 to calculate gains and losses, which are then recorded on Schedule D.
*   Brokers must provide a copy of Form 1099-B to their customers by February 15 each year for inclusion in tax returns.
*   Each transaction involving stocks, options, or commodities must be reported by brokers on separate Form 1099-Bs.

## Who Needs to File Form 1099-B?

Brokers send a 1099-B to the IRS and every customer who sold investments during the year. This form records a taxpayer's gains or losses. Investors must receive it by Feb. 15.

For example, let's assume you sold several stocks last year. The proceeds of the sales were $10,000. That figure will be reported to the IRS by the brokerage via a 1099-B form and by you as a report of a taxable [capital gain](https://www.investopedia.com/terms/c/capitalgain.asp).

Companies involved in bartering may also file this form to report changes in a corporation's [capital structure](https://www.investopedia.com/terms/c/capitalstructure.asp) or stock control.

> **Important**
>
> Brokers or barter exchanges must send 1099-B forms to clients by Feb. 15, following the tax year. If you don't receive yours, contact the issuer for a replacement copy.

## Filing Instructions for Form 1099-B

A brokerage or barter exchange must file a separate 1099-B for each transaction related to sales, including [short sales](https://www.investopedia.com/terms/s/shortsale.asp), of various securities and contracts.  

Information on Form 1099-B includes:

*   Issuer's information
*   Taxpayer's information
*   A description of each investment
*   The purchase date and price
*   The sale date and price
*   The resulting gain or loss

Commissions are not included on this form because they don't apply to these transactions.

> **Fast Fact**
>
> As a taxpayer, your capital losses are subtracted from any capital gains and may be used to reduce the taxable income you report. There are limits to the amount of capital loss that can be deducted each tax year. However, if the capital loss exceeds the limit, the difference may be carried over to the following tax year(s).

The form reports the cash received and the [fair market value (FMV)](https://www.investopedia.com/terms/f/fairmarketvalue.asp) of goods or services received or any [trade credits](https://www.investopedia.com/terms/t/trade-credit.asp) received. Taxpayers may be required to report the receipt of gains made during the bartering activity. Reportable gains can be in the form of cash, property, or stock.

A broker or barter exchange should report each transaction (other than regulated [futures](https://www.investopedia.com/terms/f/futures.asp), foreign currency, or [Section 1256](https://www.investopedia.com/terms/s/section-1256-contract.asp) option contracts) on a separate Form 1099-B.

[Form 1099-B](https://www.irs.gov/pub/irs-pdf/f1099b.pdf)

![Form 1099-B](https://www.investopedia.com/thmb/ESvAoz8EB856dkz5JlKbZZOc76A=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Screenshot2023-11-14at11.01.25AM-d5be418f3da3445ea7eaa624832cd6d0.png)

**

## Related Tax Forms to Know

If you receive a 1099-B, you will need to file Schedule D. This is where you record your gains and losses for the year. Form 8949, Sales and Other Dispositions of Capital Assets is used to record the details of the transactions.

## What Is Form 1099-B Used for?

Form 1099-B is used to report capital gains and losses that a taxpayer incurs after selling certain assets through brokerages and barter exchanges. These firms send separate forms for each transaction to both the IRS and the investor.

## How Do You Report 1099-B on Your Tax Return?

You must report the information found on Form 1099-B on Schedule D and/or Form 8949 as capital gains or losses.

## How Do You Read Form 1099-B?

Issuers include their information and yours on Form 1099-B. It also includes a description of the property sold, the acquisition date, the sale date and price, the original price, and any deductions that apply. Other information includes any federal tax withheld, gains or losses incurred, and state tax withholdings.

## Do I Have to Report 1099-B on My Taxes?

While you don't send the actual Form 1099-B to the IRS with your tax return, you must include the information that's on it on Form 8949 and send that along with Schedule D, which is what you'll use to record your totals for all transactions shown on Form 8949.

## Is 1099-B Earned Income?

No. 1099-B reports capital gains and losses. A capital gain or loss results from selling an asset you own, such as a stock, stock option, or bond. Earned income is income you receive from your employment.

## The Bottom Line

Form 1099-B, issued by brokers and barter exchanges, reports taxpayers' capital gains and losses to both clients and the IRS. While not included with the tax return, the information on Form 1099-B must be transferred to Form 8949. Taxpayers then use this information to calculate gains and losses, which are reported on Schedule D and submitted with their tax return. Ensure you report all pertinent details as required to accurately reflect your tax obligations and take advantage of potential capital loss deductions.

> **Article Sources**
>
> 1.  Internal Revenue Service. "[General Instructions for Certain Information Returns: (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G)](https://www.irs.gov/pub/irs-pdf/i1099gi.pdf)," Page 26.
>     
> 2.  Internal Revenue Service. "[About Form 1099-B, Proceeds from Broker and Barter Exchange Transactions](https://www.irs.gov/forms-pubs/about-form-1099-b)."
>     
> 3.  Internal Revenue Service. "[Form 1099-B, Proceeds from Broker and Barter Exchange Transactions](https://www.irs.gov/pub/irs-pdf/f1099b.pdf)," Pages 4-5.
>     
> 4.  Internal Revenue Service. "[Topic No. 409, Capital Gains and Losses](https://www.irs.gov/taxtopics/tc409)."
>     
> 5.  Internal Revenue Service. "[Form 1099-B, Proceeds from Broker and Barter Exchange Transactions](https://www.irs.gov/pub/irs-pdf/f1099b.pdf)," Page 5.
>     
> 6.  Internal Revenue Service. "[Instructions for Form 1099-B, Proceeds From Broker and Barter Exchange Transactions](https://www.irs.gov/pub/irs-pdf/i1099b.pdf)," Page 7.
>     
> 7.  Internal Revenue Service. "[Instructions for Form 1099-B, Proceeds From Broker and Barter Exchange Transactions](https://www.irs.gov/pub/irs-pdf/i1099b.pdf)," Pages 7-8.
>     
> 8.  Internal Revenue Service. "[About Schedule D (Form 1040), Capital Gains and Losses](https://www.irs.gov/forms-pubs/about-schedule-d-form-1040)."
>     
> 9.  Internal Revenue Service. "[About Form 8949, Sales and Other Dispositions of Capital Assets](https://www.irs.gov/forms-pubs/about-form-8949)."
>     
> 10.  Internal Revenue Service. "[Form 1099-B, Proceeds from Broker and Barter Exchange Transactions](https://www.irs.gov/pub/irs-pdf/f1099b.pdf)," Pages 4-5, 7.