Tax Help - Form 1099-B on Consolidated Statements

Taxpayers who do a significant amount of investing in the stock and bond markets might have an account with a brokerage company for the purpose of executing transactions and managing his or her investment portfolio.

In addition to providing clients with the required tax reporting statements each year (Form 1099-DIV, 1099-INT, 1099-OID, 1099-B, etc.) brokers usually provide each client with a detailed consolidated report of all aspects of his or her account.

The year-end statements provided by financial brokers are a valuable source of information for tax professionals to accurately prepare your yearly returns.

Companies design their reports differently, but in general, most provide the client with the following additional information:

• A listing of dividends and other corporate distributions by security, and the dates distributions were made;


• A listing of taxable and nontaxable interest income by security, and the dates the income was paid;


• A statement of accrued interest on debt instruments sold or purchased during the year;


• A detailed record of trading activity for the year, identifying sales, redemptions, principal payments, and other transactions;


• A detailed record of purchases during the year;


• A detailed list of cost basis of assets sold during the year.

Review these types of documents carefully. It is very easy to overlook a single item when you are going through a consolidated form that is several pages long.

Highlight all items that require entry on your tax return and check off items as you enter them.

Missing an item may cause the IRS to review the entire return.