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Watch those 1099-Bs!!

Updated: Feb 26, 2023

The assumption by most investors is that their 1099-Bs are correct and if their records differ from what the broker reports to IRS, there is a real problem.

To a certain degree that is correct.

But, first off, Form 1099-B is not always correct. Take a look at the following:

So how can a security purchased on 6/28/2019 and sold on 12/27/2019 be LONG-TERM? Good question.

So how is this error dealt with on Form 8949?

Report the gain or loss on the correct section of Form 8949, in this instance, Box A, and place a "T" and "-0-" in the Adjustment columns.

The only downside to this process is that you must FIND the error first, which means you must examine each transaction. And if there are hundreds or even thousands of transactions, this could take a while.

Lately I have been seeing errors in Sec 1256 contract gains and losses, which are reported on Form 6781 and split 60/40 long-term/short-term.

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