Yes. Every U.S. broker, from Robinhood and Webull to Fidelity and Schwab, files a Form 1099-B with the IRS for each sale you make in a taxable account, and for most stock bought after 2010 that form includes what you paid. Crypto sales now come on their own form, the 1099-DA, which exchanges sent out for the first time in early 2026 for sales made during 2025.
So the IRS already has a copy of your trading year before you start your return. Its computers compare the two, and when a sale on the broker’s form is missing from yours, the usual result is a letter called a CP2000 that arrives months after you filed.
The forms your broker sends
Brokers report under Section 6045 of the tax code, and the obligation is the same for a 50-year-old wirehouse and a three-year-old app. What you get in your tax documents folder each winter is some combination of these:
- Form 1099-B for sales of stocks, ETFs, options and bonds
- Form 1099-DIV for dividends and fund capital gain distributions
- Form 1099-INT for interest on cash sweeps, Treasury bills and bonds, once it reaches $10 for the year
- Form 1099-DA for sales of crypto and other digital assets
Most firms roll the first three into one PDF they call a composite or consolidated 1099. On its own, a 1099-DIV or 1099-INT is due to you by January 31. The 1099-B and 1099-DA are due by February 15, and for 2025 forms that date slid to February 17, 2026, because the 15th fell on a Sunday and the 16th was Presidents Day. The IRS General Instructions for Certain Information Returns extend the later February date to any statement furnished as part of a consolidated statement. That’s why your dividend figures show up in mid February along with everything else, and why filing on February 1 with a brokerage account is usually a mistake. Brokers that file 10 or more information returns have to e-file their copies with the IRS, and the e-file deadline was March 31, 2026.
The $10 line for interest is only a filing threshold for the broker. Eight dollars of interest on a cash sweep is still taxable income, and you’re expected to report it even though no form arrives.
What’s on a 1099-B, and what “noncovered” means
For each sale the 1099-B lists the security, the date sold, the proceeds, and whether the gain is short term or long term. For covered securities it also shows the date you bought and your cost basis, and the IRS gets that basis too. Under the 2026 Form 1099-B instructions, stock bought for cash in an account after 2010 is covered, shares that use average basis (most mutual fund shares) are covered if bought after 2011, and options and simpler debt instruments are covered if bought after 2013.
Anything older, or anything that came in from another firm without its basis records, is noncovered. The broker reports the proceeds and leaves basis blank on the IRS copy. With shares bought in 2009 for $8,000 and sold in 2026 for $11,000, the IRS sees an $11,000 sale and no cost. Leave it off your return and the CP2000 starts from the full $11,000, and it’s on you to prove the $8,000 so the gain drops back to $3,000. Report it on Form 8949 with your own basis and there’s nothing to argue about.
Box 1g is the other line worth a look. It shows losses disallowed under the wash sale rule. Brokers must report a wash sale only when the sale and the repurchase happen in the same account in the same CUSIP. If you sold at a loss in your Webull account and bought the same stock back at Fidelity two weeks later, the 1099-B may show the full loss. The wash sale rule still applies, and adjusting it is your job.
Is crypto reported to the IRS now?
For anything sold through a custodial platform, yes. Coinbase, Kraken, Gemini and the crypto side of apps like Robinhood began issuing Form 1099-DA for 2025 sales, reporting gross proceeds only.
Basis reporting starts with 2026 sales, and it covers less than most people assume. The 2026 instructions for Form 1099-DA define a covered digital asset as one acquired after 2025, in a custodial account at that broker, and held there until it’s sold. Bitcoin you bought in 2023 is noncovered. So is anything you moved in from a hardware wallet or another exchange, whenever you bought it. For those sales the IRS will see proceeds, and you’ll supply the cost. If you’ve been trading since 2021 and never kept records, start rebuilding them from exchange history exports now, before the 2026 form shows up with a blank basis column.
Brokers can also use optional methods for small amounts. Qualifying stablecoin sales only have to be reported once a customer’s total for the year passes $10,000, and specified NFT sales once they pass $600. A company that only sells or licenses wallet software letting you control your own private keys isn’t treated as a middleman under the instructions, so a swap made from a self-custody wallet usually won’t produce a 1099-DA. You still owe tax on it.
How the IRS uses the forms
The matching is automated. The IRS lines up the 1099s brokers filed against the returns people filed, and when they don’t agree it mails a CP2000. According to the IRS page Understanding your CP2000 series notice, the letter proposes a change to your tax based on third party information. The IRS files it under tax return reviews by mail, and the letter itself is a proposal you can dispute. You answer by the date printed on the notice. If you agree and have nothing else to add, you follow the notice’s instructions and don’t need to amend. If you have other items to report, such as the basis the IRS didn’t have, you send a Form 1040-X with “CP2000” written across the top along with your reply.
A $3,000 short-term gain left off a return, for someone in the 22% bracket, is $660 of tax plus interest from the April due date. The accuracy-related penalty is 20% of the underpayment, and the substantial understatement version kicks in only when you understate your tax by more than 10% of the correct tax or $5,000, whichever is greater. A $660 shortfall doesn’t get near that. The IRS can still assert the same 20% for negligence, though, and a pile of small misses across several years looks a lot like negligence.
When a broker withholds 24%
If you never gave the app a correct Social Security number or taxpayer ID, or the IRS tells the firm the number on file is wrong, the broker has to start backup withholding at 24% on reportable payments, which includes sale proceeds as well as dividends and interest. On a $5,000 sale that’s $1,200 sent to the IRS. It isn’t lost. It shows in box 4 of the 1099-B and you claim it as tax already paid on your return, but it can tie up a lot of cash for a year, so check the Form W-9 details in your account settings once.
What never shows up on a 1099
Trades inside a Roth IRA, traditional IRA, 401(k) or HSA don’t produce a 1099-B. You can buy and sell inside a Roth all year and the IRS hears about contributions and the account value through Form 5498, and about withdrawals through Form 1099-R, and nothing in between. Unrealized gains aren’t reported anywhere until you sell. Inherited shares get a stepped-up basis, and nothing is filed until the heir sells them.
There’s no small-gain exemption in a taxable account. A $5 gain is reportable, and the broker has already reported it.
Where it lands on your return
Sales from the 1099-B go on Form 8949 and are totaled on Schedule D. Most tax software can import the composite 1099 straight from the broker, which saves typing but carries over any mistake in the form, including a blank basis. Dividends and interest go on the 1040 itself unless you had more than $1,500 of taxable interest or ordinary dividends, in which case Schedule B is required. How the gains are then taxed, short term at ordinary rates and long term at 0%, 15% or 20%, is covered in the capital gains post linked below.
Before you file
- Wait for the composite 1099 in mid February, and for any corrected version if the broker says one is coming.
- Scan the 1099-B for noncovered lots and blank basis boxes, and fill in your cost from old statements or exchange exports.
- If you trade the same stock at two brokers or in an IRA, check for wash sales the forms didn’t catch.
- Add up 1099-DA proceeds from every exchange you used, including small ones, and match each sale to a cost.
- If a CP2000 arrives, answer by the date on the letter, even if you agree with it.
Related reading
- Capital Gains Tax on Stocks in the U.S., Explained
- Legal Ways to Reduce Taxes on Stock Gains in the U.S.
- What Your Day Trading App Costs You Per Year
This isn’t tax advice. The IRS revises the 1099-B and 1099-DA instructions every year, so check the current versions or ask a tax professional before you file.
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