How do I report a brokerage sale if the cost basis is blank? I don't want to report as zero because then my taxable gains would look larger, correct? Thank you!

[DeniseF1 · Accepted solution]

Brokerage statements will not always report the cost basis or sales category, even if the information is available right on the 1099-B.  You need to enter a reasonable estimate of cost basis.  The IRS is receiving the 1099-B information from the broker, but is relying on you to report the correct category and/or cost basis. Otherwise the entire proceeds will be considered gain.

You may need to ask the original owner, or for a rough estimate, multiply the shares by the price on the original purchase date.  Historical prices can be found at finance.yahoo.com.

For sales category:

If you held the security less than one year, use code C (short-term, not reported)

If you held the security more than one year, use code F (long-term, not reported)