Brokerage combined form, how do I know what to enter?

[ratkorn420]

I got a long form from my broker, at the top it has 4 sections. 1099-int, 1099-div, 1099-misc and 1099-b. For the 1099-b, it has 4 lines:8,9,10,11. All 4 have $0. On the following pages, there's a lot of summary information with a bunch of numbers and lines. My question is, if it shows $0 in all the lines at the top, does that mean that I don't need to enter this form when I do my taxes? Is all the other stuff on the following pages just for my information?

[VolvoGirl]

That is a consolidated statement. That will have sections for 1099-Int and 1099-Div and 1099B and maybe some other 1099s.  You need to enter each section in the right place.  So read it carefully and look for headings.... 1099-INT for interest or 1099-DIV for Dividends or 1099B for sales.

If you don’t have any sales you don’t enter the 1099B section.  You don’t have any amounts in the 1099B section?  Like Proceeds in box 1d?

[ratkorn420]

@VolvoGirl Thanks for your reply. At the top is $0, but yes when I scroll to the following pages under the 1099-b section it does have dollar amounts under 1d- proceeds and 6- reported gross or net. It has 4 of these headings: short term transactions for noncovered tax lots, long term for covered tax lots, long term for noncovered tax lots and undetermined term for noncovered tax lots, all of them have $amounts under 1d. So if I'm understanding correctly, I will need to enter these numbers listed under 1d for all 4 of those, even though it shows $0 for 8,9,10,11 at the top correct

[DianeW777]

Yes, you will report any sales with gross proceeds, net of any wash sales that may still be active.

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:

1. Long term: held more than one year (one year plus one day) - received special capital gain tax treatment
2. Short term: held one year or less - taxed at your ordinary rate of tax

How to Report:

1. For any sale where the cost basis is not reported to the IRS (noncovered) you must know the cost of the item sold and how long you owned it. The finance company my have provided this to you even if they didn't report to the IRS.
2. For any sale where the cost basis is reported to the IRS you need only to know when the item purchased and sold. 
3. If you sold securities in one sale that were purchased at different times you can select 'Something other than a date', then select 'Various' 
4. You must still select the holding period for all sales

Take aways: If your security was held with the same financial agent the entire time you owned it, then you can rely on their information. If you transferred any of your holdings to another broker at any time, only you will know the cost basis.

Wash Sale Rule Defined:

• A wash sale occurs when an investor sells or trades a security at a loss, and within 30 days before or after, buys another one that is substantially similar.
• It also happens if the individual sells the security at a loss, and their spouse or a company they control buys a substantially similar security within 30 days.
• The wash-sale rule prevents taxpayers from deducting a capital loss on the sale against the capital gain.

Affect on Cost Basis:

• The loss that occurs on a wash sale is added to the cost basis of the shares purchased that created the wash sale.
• When all shares are sold and there is no repurchase, that increased cost basis will be used in full and used to determine gain or loss.

As long as you are tracking the wash sales and are not using them on the tax return when you are not allowed, then you can simply enter the same cost basis as the selling price. This will  reconcile your tax return with your Form 1099-B Proceeds which is what the IRS is comparing.

• Where do I enter Form 1099-B?

@ratkorn420