Stock Sale Organizer

Form1099 B Proceeds from Broker and Barter Exchange Transactions

You will receive Form 1099-B, Proceeds from Broker and Barter Exchange Transactions if any of the following events happened during the year:

• You sold stocks or bonds
• Your brokerage firm sold stocks or bonds for an account you own
• You exercised certain stock options granted to you by your employer

 If you received Form 1099B, you must report the following information on your tax return.

• Gross proceeds for each sale
• Your cost-basis in the stock you own
• Net profit for each sale

Your brokerage company does not report net profits from sales to the IRS and does not report your cost-basis to the IRS.  You must include important information about your stock sale on your tax return.

Important Year-End Information

Some brokerage firms issue year-end statements showing stock sales and cost-basis information.  If you received such a statement, please bring the statement to your tax interview.  If your broker did not provide you with a year-end statement, or if the information on your year-end statement is incomplete, you should contact your broker to request the information.

Inherited or Gifted Stock

Be sure to notify your preparer if you acquired your stock through inheritance, as a gift or in a divorce.  Special rules apply to calculating cost basis in these situations.

Exercising Stock Options

There are two kinds of stock options:

• Qualified, and
• Non-qualified

If you exercised but did not sell stock options, you could have qualifying options and may need to report the purchase of your options on your tax return under the rules for calculating the Alternative Minimum Tax.

If you sold qualified or non-qualified stock options at work, it is likely your profits from the sale of these options were reported on your W2.  Even if income from the exercise of stock options was included in your W2, it is still necessary to report the sale on your tax return in most cases. We will need you to provide us with the following information to properly report the sale of stock options on your tax return:

• 1099B
• Gross-up information showing how much income was added to your pay due to exercise of stock options. 
• The exercise price of your options

Your employer should be able to provide you with much of this information.

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