To determine if the basis was reported to the IRS, you should check the relevant boxes on Form 1099-B or Form 1099-DA (or substitute statement) provided by your broker. These forms include specific boxes to indicate whether the basis was reported to the IRS:
For Form 1099-B:
- Box 12 — Check if Basis Reported to IRS: If this box is checked, the basis was reported to the IRS. If it is not checked, the basis was not reported to the IRS.
For Form 1099-DA:
- Box 2 — Check if Basis Reported to IRS: If this box is checked, the basis was reported to the IRS. If it is not checked, the basis was not reported to the IRS.
Additionally, if you are reporting transactions on Form 8949, you must check the appropriate box (A, B, C for short-term; D, E, F for long-term) based on whether the basis was reported to the IRS and whether you received a Form 1099-B or 1099-DA. For example:
- Box A or G — Short-term transactions where basis was reported to the IRS (Form 1099-B or 1099-DA with Box 12 or Box 2 checked).
- Box B or H — Short-term transactions where basis was not reported to the IRS (Box 12 or Box 2 not checked).
- Box D or J — Long-term transactions where basis was reported to the IRS.
- Box E or K — Long-term transactions where basis was not reported to the IRS.
If the basis was reported to the IRS and no adjustments are needed, you may aggregate these transactions and report them directly on Schedule D (line 1a for short-term, line 8a for long-term) without filing Form 8949. However, if adjustments are required (e.g., incorrect basis reported), you must use Form 8949 and complete Column (g) using the worksheet provided in the instructions.
Source:
Form 8949
Form 1099-DA
Form 1099-B
Disclaimer: Always verify details with current Federal or State Department of Revenue Forms and Instructions. Tax rules may vary by jurisdiction and year. For complex situations, consult a CPA or tax attorney.