Quick answer: Report the transaction even when Form 1099-B says basis was not reported to the IRS. Enter the correct basis you can substantiate on Form 8949, choose the noncovered transaction box, and carry totals to Schedule D. Do not automatically enter zero merely because the broker left basis blank.
This guide explains the federal or state rule in practical filing terms. It uses the latest official material available on August 15, 2026; always use the form and instructions for the tax year you are filing because line numbers, limits and procedures can change.
At a glance
| Question | Practical answer |
|---|---|
| Who this applies to | Sales of securities or other capital assets for which the broker did not report basis |
| What it does not cover | Transactions eligible for direct aggregation on Schedule D without adjustments and noncapital business-property sales |
| Where it is handled | Form 8949 using box B or E when a 1099-B exists but basis was not reported; box C or F when no 1099-B exists |
How the rule works
Start with the legal character of the payment, transaction, benefit or form—not the label used in an advertisement or summary. Tax results can differ when ownership, timing, filing status, residency, basis, participation or documentation changes. The controlling return instructions should be reconciled with all information statements before filing.
- Use box B for short-term and box E for long-term Form 1099-B transactions with no IRS-reported basis.
- Enter the amount realized and the basis you determine from purchase confirmations, prior statements, inheritance or gift records.
- Use column (g) and the correct code only for a separate adjustment; missing broker basis alone does not require an adjustment when the correct basis is entered in column (e).
- Wash sales, corporate actions, reinvested dividends and return-of-capital distributions can alter basis.
- If basis truly cannot be established, zero may be the defensible amount, but document the reconstruction attempts.
Practical example
A taxpayer sells noncovered shares for $12,000. Old statements show a $9,500 purchase cost and no later basis adjustments. The taxpayer reports proceeds of $12,000 and basis of $9,500 in the applicable Form 8949 box, producing a $2,500 gain even though the broker did not report basis.
The example isolates the main rule and is not a tax calculation for every fact pattern. Other income, deductions, state conformity, related-party rules and prior-year carryovers can change the final result.
Step-by-step checklist
- Match every sale to a 1099-B or other proceeds record.
- Determine holding period before choosing the Form 8949 box.
- Reconstruct basis from primary documents and corporate-action history.
- Apply required adjustment codes only when relevant.
- Reconcile Form 8949 totals to Schedule D and the brokerage proceeds total.
Keep copies of the filed return, schedules, source documents, calculations and submission confirmation. If an issuer or agency document is wrong, request a correction instead of silently changing a number without an explanatory record.
Common mistakes to avoid
- Using zero basis without searching prior statements.
- Adding basis as a negative adjustment instead of entering it in the basis column.
- Ignoring reinvested dividends that were already taxed and added to basis.
A tax software interview can help transfer information, but it cannot verify an uncertain legal classification or recreate missing evidence. Pause and obtain advice from a credentialed tax professional or the responsible agency when the dollars are material or the facts are unusual.
Related NavajoTax guides
For connected planning and reporting issues, see IRA capital gains and NIIT, financial research records. Read related pages as a topic cluster, but follow the year-specific official form for the return you actually file.
Frequently asked questions
What if the broker reported the wrong basis?
Enter the broker-reported basis and use the appropriate Form 8949 adjustment code and amount, following the instructions.
What if no Form 1099-B was issued?
Report the sale using box C for short-term or F for long-term transactions, as applicable.
Can an appraisal establish basis?
An appraisal may help with value at a relevant date, but it does not replace acquisition and adjustment records in every case.
Sources reviewed
Last reviewed: August 15, 2026. This article provides general educational information, not individualized tax, legal, investment or benefits advice.