No, that is not what is being implied. The IRS receives the same forms you receive (1099-B, 1099-DIV).
What is explained by @JamesG1 is that in some cases the brokerage does not know your cost basis and therefore does not enter an amount. This can happen in at least two circumstances.
- The investment was moved to another broker and the second broker does not know your activity or cost basis from the beginning.
- The investment was with the same holding company before the IRS initiated the required reporting of cost basis by the brokerage companies. (approximately 2008)
- Note that reinvested dividends continue to accumulate cost and stocks at various prices and purchase dates.
Bottomline is that you must always know your cost basis for any investment you sell. For this reason you will want to add a cost basis that is not present on your tax forms unless you do not know. If you do not know, the full amount of the sale in these transactions would be taxable income.
There are several internet sites that can provide a cost per share if you know the dates and times of your purchases for any stock where the basis is not reported on your documents. For these reasons the statement above and printed here for your convenience is very important.
- The transaction that you listed would be labeled E and reported on Part II of IRS form 8949. Even though the cost basis was not reported to the IRS by the broker, you will be reporting the basis to the IRS when you file your 2023 Federal 1040 tax return
@Pip_12_mn
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