Your broker’s Form 1099-B reports proceeds from stock, ETF, and many options sales. The cost-basis boxes are a starting point—not always the final number you put on Form 8949. Wash sales, corporate actions, transferred lots, and some options closes can require basis adjustments you (or your tax software) must enter so gains and losses match reality.
Where the form usually arrives: a taxable brokerage account at Fidelity, Vanguard, Schwab, E*TRADE, or similar. Wash-sale mechanics: Wash sale rule basics and Wash sales across accounts. Filing orientation: Filing taxes for beginners. Portfolio framing: Investing basics for beginners.
What “basis adjustment” means on a 1099-B
| Situation | What the 1099-B often shows | What you may need to adjust |
|---|---|---|
| Wash sale disallowed loss | Proceeds + code; basis may already include some wash adjustment inside that broker | Add disallowed loss to replacement shares; fix Form 8949 if the broker missed a cross-account repurchase |
| Missing or “0” basis (older lots, transfers) | Proceeds reported; basis blank or not provided to IRS | Reconstruct from trade confirms, prior 1099-Bs, or transfer statements—do not invent |
| Options / complex closes | Contract proceeds; basis treatment varies | Align with options trading tax basics; some brokers report incompletely |
| Corporate action / spin-off | Partial basis allocation | Use issuer / broker allocation worksheets |
| Covered vs noncovered lots | Covered: broker reports basis to IRS; noncovered: often proceeds only | You still report correct basis for noncovered lots |
“Covered” security status and box checkboxes matter for whether the IRS already received a basis figure. Mismatches invite notices even when your spreadsheet is right—keep lot-level records.
Wash sales and the adjustment column
When a wash sale disallows a loss, the usual educational pattern is: current-year loss reduced, and the disallowed amount increases basis of the replacement shares (so you may recover the tax benefit later when those shares sell cleanly). Brokers often adjust basis for wash sales they can see inside one login. They frequently miss a repurchase in an IRA, a spouse’s account, or a second broker—your Form 8949 still needs the right codes and adjustments.
Worked example: missing wash adjustment across brokers
Jordan sells 100 shares of ETF TOTL in a Schwab taxable account for a $1,200 loss on April 3. On April 18 Jordan buys the same ETF in a Fidelity taxable account. Schwab’s 1099-B shows the loss with no wash-sale flag (it never saw the Fidelity buy). Fidelity’s 1099-B shows the new lot at the purchase price only.
At filing, Jordan (or a CPA) must treat the $1,200 as a wash-sale disallowed loss on Form 8949 and increase basis of the Fidelity lot by $1,200. Skipping that step understates income now and can double-count the loss later. If instead the buyback had been inside a traditional IRA, many practitioners warn the loss can be disallowed without a useful basis bump—confirm with a tax professional before mixing taxable harvests and IRA buys (Wash sales across accounts).
Missing cost basis
Transferred lots from Computershare, an old E*TRADE login, or an ESPP/RSU release sometimes arrive with unknown basis. Steps that usually help:
- Download historical confirms and prior-year 1099-Bs from every broker that ever held the lot.
- Ask the transfer agent or plan administrator for acquisition date and cost.
- For employer stock, separate compensation income already on the W-2 from capital gain on the 1099-B—do not treat W-2 income as basis again.
- If basis remains unknown after a good-faith search, IRS publications describe limited approaches; document what you tried and talk to a preparer before guessing.
Practical habits
- Turn on cost-basis lot tracking (specific ID when you care which lot sells) before year-end harvests.
- Export the full 1099-B detail CSV—not just the summary PDF.
- Reconcile wash-sale codes against all household accounts you control.
- For options, read the broker’s tax white paper; options tax basics are a frequent adjustment source.
- Keep Form 8949 worksheets with the return PDF for at least several years.
Checklist
- Separate covered and noncovered lots on every 1099-B.
- List wash-sale candidates across brokers, IRAs, and joint accounts.
- Reconstruct missing basis from confirms before you e-file.
- Enter basis adjustments on Form 8949 when the broker’s box is incomplete.
- Match W-2 compensation stock income to RSU/ESPP footnotes so you do not double-count.
- Re-check corrected 1099-Bs (common through February–March) before you lock the return.
Reinvested dividend lots and DRIP basis tracking: DRIP cost basis basics.
Choosing which lots to sell (FIFO vs specific ID): Tax lot identification basics.
Mutual-fund average-cost elections: Average-cost basis for mutual funds.
Form 8949 column (f)/(g) codes for wash sales and basis mismatches: Form 8949 adjustment codes basics.
Covered vs noncovered lots and broker basis-reporting cutoffs: Broker cost basis reporting cutoff basics.
Forward and reverse stock splits that change share count but keep total basis: Stock split cost basis basics.
Corporate spin-offs that allocate basis across parent and new shares: Spin-off cost basis basics.
Cash-in-lieu from mergers and fractional shares on 1099-B: Merger cash-in-lieu basics.
Cash tenders and mixed merger consideration on Form 1099-B: Tender offer tax basics.
Educational only. Not tax, legal, or investment advice. Form 1099-B reporting and basis rules are technical; verify with current IRS Form 8949 / Schedule D instructions and a qualified tax professional.