The sales proceeds and cost basis reported on your tax return are the sums of all proceeds and cost bases on all your forms 1099-B. This means that if with the same funds of $40,000, you have traded say 15 times during the year, your proceeds and cost basis would be around $600,000 (plus or minus any capital gain or loss).
You can show your trading account to prove that your assets were only $40,000 and not the proceeds of $500k or more shown on your tax return.
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