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elyz_97
Returning Member

Are non-covered securities on my 1099-B taxable?

I didn't personally sell any shares of my stock but my company has during a merger.

 

In the 1099-B provided by the Brokerage Firm, it shows that the sale had a rather large amount in "Cost or Other Basis" (long-term non-covered security) while I actually did not lose that money because I gained relatively the same amount (with some cash) as shares in the new stock.

Do I still have to report that 'sale' transaction in my Schedule D/8949? Will the IRS think that's a loss?

Thanks!

3 Replies
Carol_GoCougs
New Member

Are non-covered securities on my 1099-B taxable?

You need to report what is shown on your form 1099-B even if "non-covered".  Non-covered means that the proceeds are reported to the IRS, but the cost basis is not.  So you will enter both the proceeds and the cost basis, and the difference will be a taxable gain or loss.

elyz_97
Returning Member

Are non-covered securities on my 1099-B taxable?

Does that apply to stocks exchanged during a Merger & Acquisition?

 

Askking because according to my tax pro at H&R Block, they are not.

ThomasM125
Expert Alumni

Are non-covered securities on my 1099-B taxable?

If you received a form 1099-B, you need to report the cost basis and sale amount that applies to it on your tax return. The IRS will receive a copy of it and look to find the entries on your tax return. If there are sale proceeds listed on the form 1099-B but no cost basis, the IRS will assume the sale amount is a taxable gain and you will receive an assessment sometime down the road for the taxes applicable to it.

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