Credits & deductions

Taxes on Selling Stock: 1099-B, Basis and Schedule D

Updated October 1, 2026

When you sell stock for more than your basis (generally what you paid), you have a capital gain. Hold it more than one year and it is long term. One year or less is short term. Your broker reports the sale on Form 1099-B, and you report it on Form 8949 and Schedule D.

The basic idea

You only owe tax on a stock when you sell it, not while it sits in your account. The gain is the sale price minus your basis. If the sale price is lower, you have a loss. The IRS calls these capital gains and capital losses.

Selling personal-use property, like your car, is treated differently. The IRS says losses on personal-use property are not deductible. This post is about investments.

A quick example of the idea, using round numbers. If you bought shares for a total of one amount and sold them later for a larger amount, the difference is your gain. If you sold them for less, the difference is a loss. That single subtraction is the heart of everything on the forms.

Short term versus long term

The line is one year. The IRS says that if you hold the asset for more than one year before you sell, the gain or loss is long term. If you hold it for one year or less, it is short term.

Why it matters: long-term gains get preferential rates, while short-term gains are taxed as ordinary income at your regular rates. The IRS lists 0%, 15%, and 20% long-term rates that depend on your taxable income, and the income cutoffs change each year. We use the current figures when we prepare your return, so you do not have to look them up.

A quick check you can do today: pull up your last statement and find the purchase date of anything you plan to sell. If it is close to the one-year mark, the exact date can change how the gain is taxed, so count the days carefully and ask before you sell if you are unsure.

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What Form 1099-B shows

The IRS describes Form 1099-B as the form that reports proceeds from broker and barter exchange transactions. If your broker sold stock for you, expect one. It generally shows:

What you sold and when.
The sale proceeds.
The purchase date and cost basis, when the broker has them.
Whether the gain or loss is short term or long term.

By law, brokers have until February 15 to send Form 1099-B. When that date lands on a weekend or a holiday, it moves to the next business day. For the 2025 forms, February 15, 2026 was a Sunday and the next day was Washington's Birthday, so the IRS date was February 17, 2026. Expect similar mid-February timing for the forms covering 2026. Brokers often send one combined tax statement, so an early copy may change. It is worth waiting until yours is final.

Cost basis in plain words

Basis is your starting number for figuring gain. For most stock, it is what you paid, including fees. If you reinvested dividends, those purchases add to your basis. If you got shares as a gift or inheritance, or through a transfer between brokers, the basis may not be obvious.

When a broker shows basis on the 1099-B, it usually flows straight into the return. When it does not, or it looks wrong, you need your own records. Keep trade confirmations and year-end statements. Old ones are the ones people lose.

Watch out for shares you bought at different times. Each purchase can have its own date and its own cost, and your holding period is measured from that purchase date. That is why one sale can be part short term and part long term, and why detailed records help.

Form 8949 and Schedule D, simply

The IRS describes Form 8949 as the form that reconciles what was reported to you and the IRS on Form 1099-B with what you report on your return. You list your sales there, split into short term and long term. Then the totals move to Schedule D, which figures your overall capital gain or loss.

You do not have to build these by hand. The information from your 1099-B feeds them. Your job is to bring complete, accurate paperwork.

The forms also help match your records to what your broker told the IRS. If your numbers and the broker's numbers differ, the return explains why. That is another reason to keep your own statements handy.

What to gather

Every 1099-B from every account, including any corrected ones.
Purchase records for stock with missing or questionable basis.
Records for any shares from a gift, inheritance, or employer plan.
Prior year returns, in case a loss carried forward.
A list of any sales in accounts that did not send a form.

Crypto sales have their own reporting quirks. Read our crypto tax guide if that is you.

Send everything even if you think a sale was small. It is easier for us to set aside a form that does not matter than to find out later that a missing one did.

Getting help

A simple W-2 return starts at $99, and a family return starts at $299. Investment sales add forms, so we quote them in writing first. The final fee is set in that written quote, plus e-file and processing fees. See the pricing page or build an estimate on the quote calculator. We prepare returns only. We are not a CPA firm and we do not give investment advice.

Since it is late in the year, you may still have time to review your account activity before the year ends. Look at what you sold so far, and gather your records now. Getting organized in the fall means fewer surprises at filing time. For tax planning, talk with a qualified professional about your own situation, because we do not give investment advice.

FAQ

What is the difference between short-term and long-term gains?

The IRS says an asset held more than one year gives a long-term gain or loss. Held one year or less is short term. Short-term gains are taxed at ordinary rates. Long-term gains get preferential rates.

Do I owe tax if I sold at a loss?

A loss on an investment is generally reported on the same forms and can offset gains. The rules on how much loss you can use in one year are detailed, so bring your numbers and your preparer will apply them.

What if my 1099-B shows the wrong basis?

Bring your purchase records. When basis is wrong or missing, your own documents are what support the correct number on Form 8949.

Do I report stock sales if I did not get a 1099-B?

Yes. Sales are generally reportable whether or not a form arrives. Bring your account statements so nothing is missed.

Sources

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General information, not tax advice for your specific situation. Rules can change, and a human preparer reviews your facts before any return is filed. Zero Fuss Taxes is a PTIN-holding tax preparation firm. We are not a CPA firm, enrolled agents or attorneys.

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