IBKR issues a consolidated Form 1099 on or about February 15 annually. Therefore, if you have both a securities and commodities account you may receive 1099s, for each account. Your 1099 reports information such as interest earned, dividends received, payments in lieu, gross proceeds from securities/futures transactions and tax withholding.

If you are a US citizen, green card holder, or legal resident, you will be provided with a consolidated Form 1099 which contains information provided in one or more of the Forms 1099 listed below based upon the activity which has taken place within your account over the calendar year:

Form 1099-INT (Interest Income) reports interest income earned in your account including cash balance interest. Box 1 contains interest income, exclusive of US savings bond and US Treasury obligations interest. Interest from US savings bonds and US Treasury obligations is reported in Box 3. If the IRS has notified us that backup income tax must be withheld on interest income in your account, this amount will be reported in Box 4.

Margin interest paid by you is not reported to the IRS. This amount appears on your year-end statement. Please consult your tax advisor to determine the tax treatment of these payments.

Form 1099-DIV (Dividend Income) reports the total dividend payments credited to your securities account for the calendar year as "Ordinary Dividends" in Box 1a. Box 1b, "Qualified Dividends", are dividends, which are included in Box 1a that MAY be eligible for reduced tax rates. IBKR does not determine if the payments included in Box 1b have met the requirements for the lower tax rates to apply. IBKR only determines that they are payments which may be eligible for the lower tax rates. Please consult your tax advisor, see the Form 1040/1040A instructions, or IRS Publication 550 to determine the appropriate status of these payments. Box 2a “Total Capital Gain Distributions”, reports long-term capital gain distributions from mutual and exchange traded funds. Box 6, "Foreign Tax Withheld", is foreign withholding tax that has been withheld at the source related to dividends paid on American Depository Receipts (ADRs) or on foreign ordinary shares trading in the US. The country to which the tax was paid is listed in Box 7. If the IRS notified us that backup income tax must be withheld on dividends paid to your account, this amount is reported in Box 4.

Dividends that were debited due to short positions (payments in lieu) are not reported to the IRS. Payments in lieu of dividends paid to you are reported on Form 1099-MISC. These amounts also appear on your Annual statement. Please consult your tax advisor to determine the tax treatment of these payments.

Form 1099-Misc (Miscellaneous Income) reports stock loan fees received in Box 3.  Gross fee income paid to advisors and gross commissions paid to introducing brokers in Box 7. Box 8 reports substitute payments in lieu of dividends and interest. If we were notified by the IRS that back up withholding was required on your account, tax withheld is reported in Box 4.

Form 1099-OID (Original Issue Discount) reports the amortization of bond interest on discounted bonds which is taxable annually. OID is the excess of an obligation’s stated redemption price at maturity over its issue price. OID is taxable as interest over the life of the obligation. If you hold an OID obligation, generally you must include an amount of OID in your gross income each year you hold the obligation. Obligations that may have OID include bonds, debentures, notes, certificates and other evidence of indebtedness with terms of more than one year.

Box 1 contains the OID on obligations for the part of the year you owned them. Report the amount in Box 1 as interest income on Schedule B of your tax return. However, depending on the type of debt instrument, the issue or acquisition date, and other factors, you may have to figure the correct amount of OID to report on your return. See IRS Publication 1212, Guide to Original Issue Discount (OID) Instruments, for details on how to figure the correct OID. Box 2 contains other interest on OID obligations for the year, which is an amount separate from the OID. If you held the obligation the entire year, report this amount as interest income on Schedule B of your tax return. If you disposed of the obligation or acquired it from another holder during the year, see IRS Publication 550 for reporting instructions. Box 3 shows interest or principal forfeited if you withdrew the money before the maturity date of the obligation. If the IRS has notified us that backup income tax must be withheld on interest income in your account, this amount will be reported in Box 4. Box 6 shows OID on US Treasury obligations for the part of the year you owned them. Report this amount as interest income on your federal income tax return and see IRS Publication 1212 to figure any appropriate adjustments to this amount. Box 6 OID is exempt from state and local income taxes and is NOT included in Box 1.

Form 1099-B (Proceeds from Broker and Barter Exchange) reports proceeds from securities transactions including sales of stocks, bonds, short sales, redemptions, tenders and bond maturities. Additionally, profit and loss from futures is also reported on Form 1099-B.

For 2011, Form 1099-B has undergone significant changes as brokers are required to report acquisition date, cost, short-term or long-term holding period for gains and losses and disallowed wash sales for securities purchased on or after January 1, 2011 for "Covered Securities."

There are now four 1099-B forms included in the Consolidated Forms 1099:

• Covered Securities with short-term gains or losses
• Covered Securities with long-term gains or losses
• Covered Securities - short sales with short term gains or losses
• Noncovered Securities

All of the different forms 1099-B contain the same boxes, however not all of the boxes may be used on every form.

Box 1a reports the date of sale or exchange for the security. For short sales the date shown is the date the security was delivered to close the short sale.

Box 1b reports the date the security was acquired. For short sales reported is the date of acquisition for the security used to cover the short position. Box 1b will be blank for noncovered securities.

Box 2 reports gross proceeds, less commissions and fees, received from transactions involving sales and short sales of stocks and bonds, other debt obligations, commodities, forward contracts, mutual funds and other securities. This amount may be adjusted for certain related options positions.

Also included in proceeds is cash paid in lieu of fractional shares, received on a corporation's sale of fractional shares resulting from a corporate action (i.e., merger, spin/split-off or exchange). Refer to IRS Publication 550, Investment Income and Expenses, and consult your tax advisor for proper reporting of cash in lieu of fractional shares.

Box 3 reports cost or other basis of securities sold. This basis may be adjusted for certain wash sales, related options positions, and corporate actions. Box 3 will be blank for noncovered securities.

Box 4 is the amount of federal income tax withheld from the sale.

Box 5 shows the amount of nondeductible loss in a wash sale transaction. Only wash sales involving identical covered securities within a single account will be reported. Not all wash sales will be reported. For details on wash sales, see the 2011 Instructions for Schedule D (and Form 8949) Instructions and IRS Publication 550.

Box 8 shows whether the gain or loss is long-term or short-term.

IBKR does not report amounts for Box 10, 11 and 12.

Box 13 is the aggregate profit or loss of lines 10, 11 and 12 on regulated futures contracts (and options on futures contracts) for the year. Refer to Form 6781 and Instructions for guidance on how to report this amount. Box 13 is only completed on the 1099-B for Noncovered Securities.

Specific types of securities are exempt from 1099-B reporting, including:

• Single stock futures
• Money market fund redemptions
• Options expirations
• Options sales
• Forex

More sales proceeds detail for stocks and bonds as well as FIFO profit and loss estimates for stock, equity options, single stock futures, Forex, and bonds are on your Form 8949 Worksheet. Gain and loss details for futures are on your Gain/Loss Worksheet for 1256 Contracts.

For 2011 there are several items of 1099-B reporting that should be considered:

Covered securities sold short on or after January 1, 2011 will be reported when the short position is covered. Securities sold short prior to January 1, 2011 were already reported in a previous year and will not be reported when covered.

No specific gain or loss is calculated on Form 1099-B.

All four 1099-B forms must be included with your tax return.

Form 1099-R:  If you received distributions and payouts from your retirement accounts, Form 1099-R is is available around January 31.

Note: Detailed explanations of Forms 1099 are available in the Tax Agency Reports section of the US Persons and Entities Tax Reporting section of the IBKR website.  

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

Why Your TIN May Be Considered as Incorrect

If you are an individual taxpayer your TIN will be your Social Security Number (SSN) or, in the case of resident and non-resident aliens your Individual Taxpayer Identification Number (ITIN). Often an individual taxpayer TIN does not match IRS records because a name has changed through marriage, divorce, adoption, etc., and the change has not been reported to either IBKR or the SSA. Other times the account may not contain the correct SSN or ITIN of the actual owner or the title on the account does not match that used for filing tax returns (see Note 2 below).

What You Need to Do

You will need to locate your social security card and, if lost or misplaced, contact your local SSA office to obtain a replacement. If you are a resident and non-resident alien you will need to locate your ITIN card or authorization letter and, if lost, or misplaced contact the IRS to obtain a replacement. You will then need to compare the name and TIN on your social security card or ITIN card/authorization letter with the name and TIN on your IBKR account. Information regarding your IBKR account, including a form for updating your information, will be made available upon log in to Client Portal.

This comparison will require that you take one of the following four actions:

1. If the name and TIN on your account agree with the name and TIN on your social security card or ITIN card/authorization letter - Contact your local SSA office to determine whether the information on SSA’s records is different from that on your social security card and to resolve any problem. If you are holding an ITIN card or authorization letter contact the IRS to reconcile their records. a. If the SSA or IRS determines that the information is different, provide photocopies of documentation supporting where the change has been made (e.g. revised social security card or ITIN card/authorization letter, or letter from the SSA or IRA stating that their records have been amended, along with proof of identity and proof of address). b. If the SSA or IRS determines that the information does in fact agree, provide a copy of an SSA or IRS letter confirming that conclusion along with proof of identity and proof of address.

2. If the TIN on your account is different from the SSN on your social security card or the ITIN on your ITIN card/authorization letter, but the name is the same - Update your TIN through the form made available upon login to Client Portal. You do not need to contact the SSA or IRS. Provide photocopies of supporting documentation (social security card or ITIN card/authorization letter along with proof of identity and proof of address).

3. If the name on your account is different from the name on your social security card or ITIN card/authorization letter, but the TIN is the same on both – a. If the name on your account is correct, contact the SSA to correct the name on your social security card or IRS to correct the name on your ITIN card/authorization letter. Provide photocopies of supporting documentation (revised social security card or ITIN card/authorization letter along with proof of identity and proof of address); b. If the name on your social security card or ITIN card/authorization letter is correct, update your personal information through Client Portal. Provide photocopies of supporting documentation (social security card or ITIN card/authorization letter along with proof of identity and proof of address). You do not need to contact the SSA or IRS.

4. If both the name and TIN on your account are different from the name and TIN on your social security card or ITIN card/authorization letter – a. If the name and TIN on your social security card or ITIN card/authorization letter is correct, update your personal information through Client Portal. Provide photocopies of supporting documentation (social security card or ITIN card/authorization letter along with proof of identity and proof of address. You do not need to contact the SSA or IRS; b. If the name and TIN on your account is correct, contact the SSA to correct the name and SSN on your social security card or IRS to correct the name and ITIN on your ITIN card/authorization letter. Provide photocopies of supporting documentation (revised social security card or ITIN card/authorization letter along with proof of identity and proof of address). Proof of identity may be met through a government issued passport, driver’s license or green card (the document must be valid and include your name and photograph). Proof of address may be met through current lease, utility bill (less than 1 year old), mortgage statement or other evidence of property ownership. Supporting documentation may be scanned and sent via email to accountmanagement@interactivebrokers.com (please place your Account ID in the email subject line, Attn: Tax Reporting) or faxed to 312-984-1032.

IMPORTANT NOTES

1. Once you have identified the source of the mismatch, you will need to log in to Client Portal and follow the instructions for confirming and/or updating your information. Account holders who fail to provide a combination of account name and TIN which can be authenticated against IRS records within 30 days of being notified of a 1099 mismatch may be subject to backup withholding and account restrictions.

2. Certain entity type accounts such as grantor trusts or single member LLCs may file taxes under the SSN of the individual rather than having an EIN assigned.  To avoid a TIN mismatch in these situations, the name of the individual taxpayer should be entered in the first box of the W9 titled 'Name (as shown on your income tax return)' and the name of the entity on the second line titled 'Business name, if different from above'.