Payments that are covered include amounts paid in real estate transactions (Forms 1099-S); amounts paid in broker and barter exchange transactions (Forms 1099-B
); and payments to attorneys (Form 1099-MISC, if amounts are reported in box 8 or 14).
* Remaining issues include disparate repotting treatment between brokers and taxpayers of wash sales, basis adjustments for shares of publicly traded partnerships, and late and corrected Forms 1099-B.
Since most major brokers had been reporting this information (when available) to their clients for securities before 2011 as a courtesy, considerable confusion reigned during the 2012 filing season as to what information that appeared on the substitute Forms 1099-B received by taxpayers had been provided to the IRS.
It also reached out to the Securities Industry and Financial Markets Association to work on improving the clarity of data on substitute Forms 1099-B. While work remains, reports from the field indicate that the forms issued during the 2013 filing season were much improved.
If the taxpayer receives multiple Forms 1099-B
, each broker's Form 1099-B totals should be entered on a separate line of Form 8949 to facilitate IRS matching.
This is a prefiling service and is available for Forms 1099-B
, 1099-INT, 1099-DIV.
Currently, matching is only done on Forms 1099-B, Proceeds from Broker and Barter Exchange Transactions, and 1099-S, Proceeds from Real Estate Transactions, but no matching is done for put-and-call stock option transactions conducted through a broker, because they are exempt from Form 1099-B reporting.
Although matching problems do not arise if gross proceeds reported on Form 1040 match the totals on Forms 1099-B and 1099-S, a compliance problem could still occur if basis is in error or transactions not reported on Forms 1099 are part of the totals.
When reporting trading activity, most Forms 1099-B
are prepared based on the trade date, while monthly brokerage position statements are prepared on the settlement date.
Thus, any company that regularly redeems its shares from stockholders should obtain Forms W-9, Request for Taxpayer Identification Number and Certification, and issue Forms 1099-B
for those acquisitions.