Proceeds from broker and barter exchange provides the sales proceeds from multiple transactions, including sales, exchanges, covered options, and tender offers on page 2 of the Consolidate Forms 1099.

1099-B Proceeds from broker and barter exchange reporting is made up of four separate sub-sections on the 1099-B Summary Page.  The first three sections are separated based upon cost basis reporting regulations, while the fourth section includes Regulated Futures, Section 1256 contracts. 

1. Covered Securities with Short-Term gains or losses.
2. Covered Securities with Long-Term gains or losses.
3. Noncovered Securities. 
4. Regulated Future Contracts and Options.

IRS regulations classify covered and noncovered securities as outlined in the table below:

1099-B Summary Page

Transaction details appear following the Consolidated Forms 1099- Summary page.  Boxes 1d to 1g of the 1099-B report the combined total for securities classified within sections one through three.  Interactive Brokers includes cost basis reporting to the IRS for covered securities.  Noncovered securities are exempt from broker cost basis reporting due to either designation or unknown information.

1099-B Sub Sections

1. Covered Securities with Short-Term gains or losses

Section one reports proceeds and cost basis information for covered securities with a short-term gain or loss.  Grouped by their unique security identification number (CUSIP or ISIN), these covered securities correspond with the Worksheet for Form 8949 Part I Short-Term Capital Gains and Losses - Assets Held One Year or Less, Box A. 

Box 1e reflects the original or adjusted cost basis.  If applicable, a cost basis adjustment code may appears under Box 1f within the section's transaction details that follow the Summary.

2. Covered Securities with Long-Term gains or losses

Section two reports information for transactions of covered securities with a long-term gain or loss.  Also grouped by security identification number, these assets correspond with the Worksheet for Form 8949 Part II Long-Term Capital Gains and Losses - Assets Held More Than One Year, Box D.

3. Noncovered Securities

Section three reports transaction of non-covered securities including index options without determination of holding period.  Securities under this section include transactions for which the cost basis is not known or not reportable by Interactive Brokers to the IRS.  Based on personal records, the taxpayer must report the cost basis and determine the short or long term.

These assets correspond with the Worksheet for Form 8949 Part I Short-Term Capital Gains and Losses, Box B, as well as Part II Long-Term Capital Gains and Losses, Box E.

4. Regulated Future Contracts and Options

We are required to report the aggregate profit/loss in four components under Boxes 8 to 11, even though taxpayers only report the aggregate profit/loss from regulated futures.

All settled or closed contracts during the tax year are displayed in Box 8.  Any unrealized profit or loss at the beginning of the year (Box 9) and at the end of the year (Box 10) is adjusted from Box 8 to report an aggregate profit or loss on all contracts, open or closed, in Box 11.

For a contract level profit and loss summary, we include a Gain/Loss Worksheet for 1256 Contracts as part of our Year End Reports.  There is one section for Futures and one section for Options. 

Important Points

• Wash Sales: Brokers take into wash sales with calculating cost basis and holding period for covered securities within an account.  The amount of the disallowed loss and the subsequent cost basis adjustment will be reported.  For an understanding of wash sale basics, click here.
• Bond/Option: Bond and option purchases became covered securities as of January 1, 2014.
• Form 8949 Worksheet: Transactions not reported to the IRS on Form 1099-B may be included on your 8949 Worksheet, along with details for each 1099-B transaction.
• Multiple Trading Account: Each of these reports is specific to the account associated with the report, however the tax code requires you to report on your tax return across all of your trading accounts. If you hold the same security in multiple accounts and sell it, the gain or loss calculated and reported to the IRS may be different than presented on an account level and must be adjusted.
• Tax ID Numbers: An IRS identity protection ruling allows truncated reporting of tax ID numbers on 1099s.  Account tax ID numbers display the last four digits (XXX-XX-0123) on Interactive Brokers tax forms. 

Dividend and Distribution Income received by you from securities are reported on the 1099-DIV, The corresponding transaction details in the annual Dividend Report breakout dividends earned by tax category, which is available in Account Management from the Reports > Tax > Tax Forms page.  

Total Ordinary Dividends

Box 1a includes all dividend distributions from stocks, mutual funds, REITS, and UITS by U.S. and non-U.S. issuers.  This includes money market and bond dividend income.

Short-term capital gains distributions paid by mutual funds are included under Box 1a, but not under Box 2a.

Qualified Dividends

Box 1b reports the portion of total ordinary dividend income from Box 1a which may be eligible for qualified dividend treatment. Qualified dividends are taxed at the Long-term Capital Gain (LTCG) tax rate (0%, 15%, & 20%).  Consult a qualified tax adviser to verify your eligibility.

Total Capital Gains Distributions

Box 2a reports any long-term capital gain distributions paid by mutual funds and REITS.  Short-term capital gains distributions are reported under Box 1a.

Unrecaptured Section 1250 Gain

Box 2b includes real property depreciation recapture from the capital gains distributions under Box 2a, if any.  

Non-dividend Distributions

The total amount of payments classified as a return of capital paid to you is reported in Box 3.  A reduction to the cost basis of security is occurs.  This may include mutual funds, REITS, WHFITS, and corporations.

Federal Income Tax withheld

Any U.S. income tax withheld from a dividend distribution is reported under Box 4.

Investment Expenses

Your portion of investment expenses from UIT, WHFIT, and WHMT investments is reported under Box 5.   These expenses may be deductible, subject to the 2% limitation.

Foreign Tax Paid

Box 6 reports foreign tax paid, including foreign tax withheld from foreign source dividends.  This is usually attributed to a mutual fund's investment in foreign securities.  As a supplement to assist with your tax preparation, a summary of foreign dividends and tax paid on them is displayed on the annual Dividend Report.

Liquidation Distributions

Reducing your cost basis, Boxes 8 and 9 report payments as a result of  mergers or acquisitions.  Any amount of a cash payment not classified as a dividend or exceeding your basis is considered a capital gain.  Non-cash payments are a return of your investment and reduce your basis.

Exempt Interest Dividends

Generally, dividends paid by tax-exempt bond funds are listed on Box 10.  Any portion of Box 11 payments classified as Specific Private Activity Bond Interest reported to calculate AMT.

Note:

IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Circular 230 Notice:
Important: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

For U.S Persons

Interactive Brokers wishes to supply the following information which may be useful for our Spanish residents when completing the required Form 720 for the Spanish Tax Authorities.

The legal entity that holds the accounts is mentioned in the upper part of the Activity Statements. Accounts of clients resident in Spain are held by:

Interactive Brokers Ireland Limited

10 Earlsfort Terrace

Dublin, D02 T38

Ireland

The tax identification number of Interactive Brokers Ireland Limited is 3674050HH. It is regulated by the Central Bank of Ireland (CBI, reference number C423427), registered with the Companies Registration Office (CRO, registration number 657406), and is a member of the Irish Investor Compensation Scheme (ICS).

Routing instructions for depositing funds are determined based on the denomination of the currency you are depositing and the IBKR entity through which your account is held. Routing instructions are made available after creating a deposit notification via Client Portal under the Transfer & Pay menu followed by Transfer Funds.

Should you require information regarding the average cash balance in your account, you may create a Flex Query through Client Portal by navigating to Reports followed by Activity and Flex Queries.

You may similarly run a Flex Query within Client Portal in order to obtain ISIN information for non-US assets. IBKR does not provide customers with ISIN information for US securities; however CUSIPs may be obtained through a Flex Statement query provided the account has subscribed to the CUSIP Service, available for USD 1.00 per month for non-professional accounts. Customers requiring ISIN data for US securities may obtain such information from company websites or internet searches.
 

Please be aware that Interactive Brokers does not provide information to the Spanish government directly relating to Form 720. Customers are responsible for all reporting aspects and should consult with their tax advisor for any assistance in completing the required documentation.