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Stocks (Options, Splits, Traders)

Question: Should I advise the IRS why amounts reported on Form 1099-B do not agree with my Form 8949 for proceeds from short sales of stock not closed by the end of year?

Answer:

For most taxpayers, Form 1099-B (PDF) should match Form 8949 (PDF), Sales and Other Dispositions of Capital Assets.  You must declare any difference on your return.  

If you entered into a short sale on or after January 1, 2011, you will receive a 1099-B for the year in which the short sale closed.  Both proceeds and basis information related to the short sale will be reported at the same time, so amounts reported on Form 1099-B should agree with the amounts you report on your Form 8949.

If you entered into a short sale before January 1, 2011, you should have received a Form 1099-B for the year the short sale was opened reporting gross proceeds from the short sale.  When the short sale is closed in a later year, use the information from the pre-2011 Form 1099-B to determine the amount of gross proceeds from the short sale when completing your Form 8949 for the year the short sale is closed.  For a short sale entered into before January 1, 2011, your broker is permitted, but not required, to send you a Form 1099-B for the year the short sale is closed to provide you with information about the short sale.  

There may be other times when your broker reports a basis that is inconsistent with your records. The instructions for Form 8949 advise you on how to make this basis adjustment to report your taxes correctly. For more specific rules, refer to Publication 550, Investment Income and Expenses and the Instructions for Form 8949 (PDF), Sales and Other Dispositions of Capital Assets.

Additional Information:


Category: Capital Gains, Losses, Sale of Home
Subcategory: Stocks (Options, Splits, Traders)

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The OMB number for this study is 1545-1432.
If you have any comments regarding this study, please write to:
IRS, Tax Products Coordinating Committee
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