Brokers and barter exchanges are required to use IRS Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, to report the proceeds from the sale, transfer, or exchange of securities and certain property. These transactions may involve:
-
Stocks and mutual funds
-
Bonds and debt instruments
-
Futures contracts
-
Options and commodities
-
Foreign currency contracts
-
Fixed investment trusts
-
Partnership shares
-
Short sales
Each broker must issue a multi-part Form 1099-B for every customer who has sold securities, bartered property or services, or received stock or cash in connection with mergers or acquisitions.
Who Must File Form 1099-B?
The IRS considers you a broker if you are in the business of transacting sales of securities on behalf of others. This may include:
-
Individuals, corporations, and government entities
-
Barter exchanges (organizations that facilitate trades between members)
-
Dealers, custodians, and trustees
However, there are exceptions. You generally do not need to file Form 1099-B if:
-
There are fewer than 100 transactions in a year
-
The transactions are exempt from reporting (such as certain foreign securities or small-value trades under $1)
-
The activity involves specific exempt entities like tax-exempt organizations or government agencies
Common Transactions Reported on Form 1099-B
Form 1099-B covers a wide range of reportable transactions, including:
-
Sales of stocks, bonds, mutual funds, and options
-
Futures and commodities trading
-
Debt-related transactions such as CDs and OID securities
-
Foreign currency transactions
-
Barter exchanges where property or services are traded
-
Corporate actions such as mergers, acquisitions, or redemptions
The form also records the cost basis of securities (purchase price) and any adjustments that affect gains or losses, ensuring taxpayers report accurate capital gains on their tax returns.
Deadlines and Compliance
Brokers must furnish Form 1099-B to clients by February 15 and file with the IRS by February 28 (paper) or March 31 (e-file). Missing these deadlines can lead to penalties.
To stay compliant, many businesses rely on specialized 1099-B e-filing software to securely transmit forms to the IRS and provide recipients with accurate statements.
How 1099FIRE Can Help
At 1099FIRE, we specialize in 1099-B reporting and e-filing solutions. Our software helps brokers, financial institutions, and barter exchanges:
-
Import and validate transaction data quickly
-
Generate accurate recipient copies and IRS files
-
File electronically with the IRS FIRE system
-
Stay compliant with IRS deadlines and avoid penalties
👉 Need help filing Form 1099-B? Visit 1099FIRE.com today to learn more about our 1099-B software and filing services.