It depends. First, there should be no short term transactions that do not have basis reported to the IRS.
- In 2008, Congress passed legislation which required brokers to report the cost basis for securities and mutual funds to both the investors and the Internal Revenue Service (IRS), effective tax year 2011.
The difference between covered and noncovered shares is who keeps track of the cost basis.
- For covered shares, the financial organizations are required to report cost basis to both you and the IRS.
- For noncovered shares, the cost basis reporting is sent only to you.
Holding Periods:
- Long term: held more than one year (one year plus one day) - received special capital gain tax treatment
- Short term: held one year or less - taxed at your ordinary rate of tax
For Column (f) the following codes used most often: IRS Form 8949 Instructions
- B - Covered Shares Basis is incorrect
- C - Collectibles only
- D - Accrued Market Discount
- E - Selling expenses or option premiums that aren't reflected on the form or statement by an adjustment to either the proceeds or basis shown.
- W - Wash sales
- Blank - None of the other statements in this column apply because you have no adjustments
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