Broker 1099-B Reporting Problems

Brokerage 1099-B forms are not consistent across the industry, and many contain serious errors.

1099-B Cost Basis Reporting has created a big mess since 2011. These problems are huge for active traders who may have reports that are hundreds and even thousands of pages long. TradeLog has created this page dedicated to problems reported as taxpayers attempt to reconcile 1099-B with accurate Form 8949 calculations.

PLEASE NOTE:
Due to the above mentioned problems, in many cases it will be impossible to reconcile your 1099-B to Form 8949.

2014-2016 TradeLog 1099 Reconciliation Table

The chart below is designed to help you identify how your broker reports options as well as referencing known problems - which are explained in detail below.

Is your broker not listed? We only list brokers that we have been able to confirm by reviewing their reporting. If you have questions about your broker's 1099-B reporting and you have an active TradeLog subscription, then please send your 1099-B and your TradeLog data file with your questions. Click here to submit that information.

2014-2016 1099-B Problems

• Section 1256 Contracts The IRS directs brokers to separately report options that qualify as Section 1256 contracts on the 1099-B. These are often listed in a section of the reporting titled Regulated Futures Contracts. However, neither the IRS or SEC provide definitive listings of contracts that qualify for Section 1256. Therefore, interpretations may vary between brokers, CPAs, and other tax authorities as to whether a contract should be treated as Section 1256 or not.

  TradeLog uses a default listing of option contracts recognized as Section 1256, this is the Broad-Based Index Options settings in TradeLog. TradeLog's default list is based on information published by Twenty-First Securities Corporation, a recognized authority in taxation.

  Large positive or negative differences in proceeds between the 1099-B and TradeLog may be the result of different identification of Section 1256 contracts. TradeLog users can see which contracts are treated as such by going to the Find menu and choosing Futures. This will display all trades labeled with the type of FUT-XXX. Comparing that listing with the 1099-B should reveal if there are differences.

  Taxpayer options:

  1. Ultimately each taxpayer must make the final determination of which contracts they will report as Section 1256 - the broker is not responsible for those decisions. If in doubt they should consult with their CPA. TradeLog users can customize the settings for Broad-Based Index Options in the software as needed. Click here for instructions.
     
     NOTE: after updating the settings it may be necessary to edit trades already imported in order to change the Type/Multiplier from FUT-100 to OPT-100.

• Non Reported Options We have seen numerous examples where the broker does not report some options to the IRS on 1099-B for no apparent reason. These are options that are opened and closed in 2014 and typically are considered covered securities. While we cannot state definitively if the broker is in error as they may have some legitimate reason for that reporting, the bottom line is that it will affect reconciliation with TradeLog. A positive reconciliation difference it typically the result.

  Taxpayer options:

  1. If your broker lists a section of trades "Not reported to the IRS" (or categorized as Form 8949 Box C or F, or similar wording), then you should carefully review that section and note any options that are opened and closed in 2014. The proceeds for those options are typically being reported by TradeLog, but not by your broker and thus may account for any reconciliation difference.
     
     Taxpayers may wish to request the broker to explain why they did not report those trades to the IRS as it may be an error on the 1099-B. Brokers should be held responsible for reporting what is required by the IRS.

• Reporting Date for Short Sales. Brokers are not required to apply the Constructive Sale Rule when reporting short sales on 1099-B. Therefore, brokers will generally report ALL short sales as closed based on the settlement date of the closing position. Since the Constructive Sale Rule does apply to taxpayer reporting on Form 8949 there may be discrepancies between what the tax payer is required to report and what is reported on Form 8949 if there were short sales that closed at a gain in the last few days of 2014. In this case you may be reporting more sales on form 8949 than are on 1099-B. Click here to learn more about IRS short sale reporting rules.

  This problem may also carry over from previous years. If your 2013 Form 8949 reported a short sale closed in that year, but the broker did not report the same trade closed until 2014, then the 1099-B for 2014 will list short sales that you already reported to the IRS. In this situation the broker may report more sales than are reported on the 8949.

  Taxpayer options:

  1. Brokers are not required to apply the Constructive Sale Rule, therefore the 1099-B will simply not match with Form 8949 in these cases. Taxpayers may choose to include a footnote for the IRS explaining the cause of the difference.
• Expired Long Options: When a long option position is expired worthless the broker is reporting the loss in the proceeds column with a zero cost basis on the 1099-B. While the resulting gain/loss calculation is correct this reduces the total sales proceeds and is not in harmony with IRS instructions for 1099-B reporting. As a result, TradeLog may report more sales proceeds than the 1099-B. This problem has been confirmed to affect Charles Schwab reporting.
  
  Taxpayer options:
  • We have encouraged taxpayers to report this error to their broker as it does not match the IRS instructions. However, since the problem only affects the 1099-B report it may not be necessary to receive a corrected 1099-B in order to finish tax reporting in TradeLog. TradeLog will properly report the trades on Form 8949 as required by the IRS. Taxpayers may choose to report the error to the IRS using that option on the TradeLog generated statement of differences. Click here to see how to report the error.
• Wash Sales on Short Options: Some brokers report the net gain/loss in place of sales proceeds for short options on 1099-B. If there is a wash sale adjustment, then the proceeds are decreased rather than increasing the cost basis. The IRS instructions state that wash sale adjustments should increase cost basis.

  As a result, the 1099-B will report less gross proceeds (sales) than what should be reported, making reconciling the 1099 almost impossible. This is a strong reason why this method of reporting should not have been allowed by the IRS.

  This problem has been confirmed with Fidelity, OptionsXpress, TDAmeritrade, and Tradestation reporting.
  
  Taxpayer options:

  1. Since the IRS allows the brokers to report short options in this manner there is little that can be done about this problem. Irregardless of the 1099-B, TradeLog will properly report the trades on Form 8949 as required by the IRS. There may be a reconciliation difference for gross proceeds, as a reminder the 1099 Reconciliation report is only a tool for TradeLog use and is not sent to the IRS. Therefore, it is not necessary to eliminate the difference as long as it can be accounted for.
• Interactive Brokers End of Year Short Sales: Interactive Brokers is reporting all short sales as closed on the trade date of the close position. The IRS instructions for 1099-B reporting state that a short sale is reported as sold on the date the security was delivered to close the short sale, this is generally the settlement date of the close position. The IRS says that the Date of Acquisition is the date the security was acquired to close the short sale, this is the trade date of the close position. IB's reporting of short sales as sold on the trade date is different from most other brokers.
  
  Because IB is reporting by trade date, they may report some short sales as closed in 2014 whereas other brokers would report the sale closed in 2015 because of settlement. TradeLog reports all short sales based on Form 8949 and Publication 550 instructions, which are also different than 1099-B instructions. The 1099-B reconciliation process for reconciling sales in TradeLog is designed to account for the reporting of short sales based on the IRS rules referenced above. Therefore, IB customers who have short sales that close in the last three business days of 2014 may have reconciliation differences in gross sales and cost basis between Form 8949 and the 1099-B.
  
  Taxpayer options:
  1. Interactive Brokers has not changed their position regarding their reporting. TradeLog users who have reconciliation differences for proceeds should examine closely the short sales closed in the final days of the current and previous tax years. Often the differences can be accounted for with that examination. As a reminder the 1099 Reconciliation report is only a tool for TradeLog use and is not sent to the IRS. Therefore, it is not necessary to eliminate the difference as long as it can be accounted for.
• Exercised Cash Settled 1256 Contracts Some brokers report the exercise of cash settled Section 1256 contracts in the trade history as if shares of the index/fund are received then sold - which is not possible and will be incorrectly reported on TradeLog's tax reporting. Large positive or negative differences in proceeds may indicate this problem. TD Ameritrade is known to report in this way.
  
  Taxpayer options:
  1. An adjustment in TradeLog is required to properly account for exercised cash settled contracts. Click here to see our more extensive details on how to identify and adjust this situation.

2013 1099-B Problems

The following problems affect 1099-B reporting in general because of differences in IRS rules.

• Reporting Date for Short Sales. Short sales are not necessarily reported by the trade date like other trades. In general, a short sale closed at a loss is reported based on the settlement date of the closing trade. Short sales closed at a gain are subject to the Constructive Sale Rule, which means they should be reported as closed on the trade date of the closing trade. Learn more about short sale reporting.

  Brokers are not required to apply the Constructive Sale Rule when reporting short sales on 1099-B. Therefore, brokers will generally report ALL short sales as closed based on the settlement date of the closing position. Since the Constructive Sale Rule does apply to taxpayer reporting on Form 8949 there may be discrepancies between what the tax payer is required to report and what is reported on Form 8949 if there were short sales that closed at a gain in the last few days of 2013. In this case you may be reporting more sales on form 8949 than are on 1099-B

  This problem may carry over from previous years also. If your 2012 Form 8949 reported a short sale closed in that year, but the broker did not report the same trade closed until 2013, then the 1099-B for 2013 will list short sales that you already reported to the IRS. In this situation the broker may report more sales than are reported on the 8949.

  Taxpayer options:

  1. Brokers are not required to apply the Constructive Sale Rule, therefore the 1099-B will simply not match with Form 8949 in these cases. Taxpayers may choose to include a footnote for the IRS explaining the cause of the difference. Taxpayer may also need to verify the short sales reported on the 8949 are on the correct section of that form; if the trade was not reported on the 1099-B then it should be reported on Section C of either Part 1 or Part 2 of Form 8949. Click here for instructions to assign 8949 codes to trades if needed.

Interactive Brokers

• We have seen examples that indicate Interactive Brokers is reporting all short sales as closed on the trade date of the close position. The IRS instructions for 1099-B reporting state that a short sale is reported as sold on the date the security was delivered to close the short sale, this is generally the settlement date of the close position. The IRS says that the Date of Acquisition is the date the security was acquired to close the short sale, this is the trade date of the close position. IB's reporting of short sales as sold on the trade date is different from most other brokers we have seen and appears to be incorrect based on 1099-B requirements.

  Because IB is reporting by trade date, they may report some short sales as closed in 2013 whereas other brokers would report the sale closed in 2014 because of settlement. TradeLog reports all short sales based on Form 8949 and Publication 550 instructions, which are also different than 1099-B instructions. The 1099-B reconciliation process for reconciling sales in TradeLog is designed to account for the reporting of short sales based on the IRS rules referenced above. Therefore, IB customers who have short sales that close in the last three business days of 2013 may have reconciliation differences in gross sales and cost basis between Form 8949 and the 1099-B.

• IB is adjusting for wash sales between some option trades. These trades and corresponding wash sales are not reported on 1099-B. However, we have seen examples where the cost basis of an exercised option was adjusted for a wash sale. In this case, the assigned stock position was adjusted for the option premium, and that adjustment included a wash sale between options. Since the assignment can result in a sale of stock (such as in a call option), the result is a wash sale adjusting sale proceeds for a stock.

  There are serious questions regarding this method of adjusting an exercised option for a wash sale based on IRS rules for option reporting in Publication 550. Since the broker does not report options to the IRS, the real problem in this situation is the adjustment to sale proceeds which can cause a difference in the total sales reported on Form 8949 and the total from 1099-B. This difference can be very difficult to isolate since the options are not reported on 1099-B; it requires an examination of the realized G&L reporting from IB, look for wash sales that were adjusted to exercised options.

TradeStation

• When a short sale triggers a wash sale, TradeStation is adjusting the Proceeds of the trade for the wash sale instead of the Cost Basis. The result is that the Gross Proceeds on the 1099-B may be less than the proceeds reported by TradeLog based on trade history (on the 1099 Reconciliation report this will show as a positive difference).

  Taxpayer options:

  1. File a footnote with Form 8949 to notify the IRS that the broker adjusted proceeds instead of cost basis for some wash sales on the 1099-B, or
  2. Do nothing, TradeLog has adjusted the wash sales on short sales based on IRS rules for Form 8949 and the 1099 reconciliation report from TradeLog is NOT sent to the IRS, therefore you may choose to take no additional action.

Have you seen a 1099-B problem not listed above? Submit an online support request and let us know!

2012 1099-B Problems

Below is a list of known issues or facts that we have had reported about various broker 1099-B reports for the 2012 tax year. Please be aware of these factors if you are having difficulties reconciling your trade history. Remember, brokers have been asked to do something almost impossible in what they have to report, therefore there are many differences and some areas are matters of interpretation. Our goal is to help you be aware of why your 1099-B may report things they way it does, and try to help resolve reconciliation challenges.

• Reporting Date for Short Sales. Short sales are not necessarily reported by the trade date like other trades. In general, a short sale closed at a loss is reported based on the settlement date of the closing trade. Short sales closed at a gain are subject to the Constructive Sale Rule, which means they should be reported as closed on the trade date of the closing trade. See our Trader Tax Topic to learn more.

  Brokers are not required to apply the Constructive Sale Rule when reporting short sales on 1099-B. Therefore, brokers will generally report ALL short sales as closed based on the settlement date of the closing position. Since the Constructive Sale Rule does apply to taxpayer reporting on Form 8949 there may be discrepancies between what the tax payer is required to report and what is reported on Form 8949 if there were short sales that closed at a gain in the last few days of 2012. In this case you may be reporting more sales on form 8949 than are on 1099-B

  This problem may carry over from previous years also. If your 2011 Form 8949 reported a short sale closed in that year, but the broker did not report the same trade closed until 2012, then the 1099-B for 2012 will list short sales that you already reported to the IRS. In this situation the broker may report more sales than are reported on the 8949.

  Taxpayer options:

  1. Brokers are not required to apply the Constructive Sale Rule, therefore the 1099-B will simply not match with Form 8949 in these cases. Taxpayers may choose to include a footnote for the IRS explaining the cause of the difference. Taxpayer may also need to verify the short sales reported on the 8949 are on the correct section of that form; if the trade was not reported on the 1099-B then it should be reported on Section C of either Part 1 or Part 2 of Form 8949. Click here for instructions to assign 8949 codes to trades if needed.

E*TRADE

• E*TRADE properly segregates their 1099-B reporting based on holding period and covered / non-covered securities. This results in four or more sections of the 1099-B. They do not provide a total of all Gross Proceeds reported on 1099-B. This total is not required by the IRS, however some TradeLog users get confused when looking up Total Gross Proceeds for reconciling their 1099. E*Trade clients need to find the section total for "Sales Price Less Commissions and Option Premiums" (Box 2a) at the end of each sub section of the 1099-B; add up each sub-total in order to get the total Gross Proceeds reported on 1099-B.

Fidelity

• Fidelity appears to have a stricter interpretation of IRS definitions for covered securities than some other brokers. Therefore, securities that may be reported as covered by another broker may not be reported as covered by Fidelity. Whether Fidelity is accurate or not in their classification would require close examination of IRS requirements along with the tax structure of the stock issuer, and possibly a legal opinion. TradeLog uses general guidelines for assigning covered securities. Therefore, adjustments may need to be made in Tradelog to assign some securities to the non-covered section of Form 8949 for accurate 8949 reporting. Click here to learn more about adjusting 8949 code in TradeLog.

  In addition, we have seen examples where Fidelity reported most trades for a security as covered, but some trades in the same year for the same security were not reported as covered. This can also affect the accuracy of reporting and may require adjustment manually in TradeLog. Click here to learn more about adjusting 8949 code in TradeLog.

• When a short sale triggers a wash sale, Fidelity is adjusting the Proceeds of the trade for the wash sale instead of the Cost Basis (see more details on our blog article: Wash Sale Adjustments on Short Sales). The result is that the Gross Proceeds on the 1099-B may be less than the proceeds reported by TradeLog based on trade history (on the 1099 Reconciliation report this will show as a positive difference).

  Taxpayer options:

  1. Request the broker to provide a correct accounting of covered securities, and/or correct their method for calculating wash sales on short sales and provide a new 1099-B, or
  2. File a footnote with Form 8949 to notify the IRS that the broker did not report all covered securities as required, and/or incorrectly adjusted proceeds instead of cost basis for some wash sales, or
  3. Do nothing, TradeLog can override the covered security code for any security so the resulting cost basis totals match the 1099, and TradeLog adjusts wash sales on short sales correctly based on IRS rules. The 1099 reconciliation report from TradeLog is NOT sent to the IRS, therefore you may choose to take no additional action.

Lightspeed Trading

• We have seen examples that indicate Lightspeed is reporting all short sales as closed on the trade date of the close position. The IRS instructions for 1099-B reporting state that a short sale is reported as sold on the date the security was delivered to close the short sale, this is generally the settlement date of the close position. The IRS says that the Date of Acquisition is the date the security was acquired to close the short sale, this is the trade date of the close position. Lightspeed's reporting of short sales as sold on the trade date is different from most other brokers we have seen and appears to be incorrect based on 1099-B requirements.

  Because Lightspeed is reporting by trade date, they may report some short sales as closed in 2012 whereas other brokers would report the sale closed in 2013 because of settlement. TradeLog reports all short sales based on Form 8949 and Publication 550 instructions, which are also different than 1099-B instructions. The 1099-B reconciliation process for reconciling sales in TradeLog is designed to account for the reporting of short sales based on the IRS rules referenced above. Therefore, Lightspeed customers who have short sales that close in the last three business days of 2012 may have reconciliation differences in gross sales and cost basis between Form 8949 and the 1099-B.

Interactive Brokers

• We have seen examples that indicate Interactive Brokers is reporting all short sales as closed on the trade date of the close position. The IRS instructions for 1099-B reporting state that a short sale is reported as sold on the date the security was delivered to close the short sale, this is generally the settlement date of the close position. The IRS says that the Date of Acquisition is the date the security was acquired to close the short sale, this is the trade date of the close position. IB's reporting of short sales as sold on the trade date is different from most other brokers we have seen and appears to be incorrect based on 1099-B requirements.

  Because IB is reporting by trade date, they may report some short sales as closed in 2012 whereas other brokers would report the sale closed in 2013 because of settlement. TradeLog reports all short sales based on Form 8949 and Publication 550 instructions, which are also different than 1099-B instructions. The 1099-B reconciliation process for reconciling sales in TradeLog is designed to account for the reporting of short sales based on the IRS rules referenced above. Therefore, IB customers who have short sales that close in the last three business days of 2012 may have reconciliation differences in gross sales and cost basis between Form 8949 and the 1099-B.

• IB is adjusting for wash sales between some option trades. These trades and corresponding wash sales are not reported on 1099-B. However, we have seen examples where the cost basis of an exercised option was adjusted for a wash sale. In this case, the assigned stock position was adjusted for the option premium, and that adjustment included a wash sale between options. Since the assignment can result in a sale of stock (such as in a call option), the result is a wash sale adjusting sale proceeds for a stock.

  There are serious questions regarding this method of adjusting an exercised option for a wash sale based on IRS rules for option reporting in Publication 550. Since the broker does not report options to the IRS, the real problem in this situation is the adjustment to sale proceeds which can cause a difference in the total sales reported on Form 8949 and the total from 1099-B. This difference can be very difficult to isolate since the options are not reported on 1099-B; it requires an examination of the realized G&L reporting from IB, look for wash sales that were adjusted to exercised options.

TD Ameritrade

• We have received reports where TD Ameritrade clients found the 1099-B to be missing trades, when reported to TD Ameritrade they were informed that a new 1099-B will be issued to them in a few weeks. If TD Ameritrade clients have irreconcilable 1099-B problems they should contact TD Ameritrade to verify whether the 1099-B issued was accurate.

Taxpayer options:

1. Consider filing an extension until the broker is able to provide a corrected 1099-B.

TradeStation

• When a short sale triggers a wash sale, TradeStation is adjusting the Proceeds of the trade for the wash sale instead of the Cost Basis. The result is that the Gross Proceeds on the 1099-B may be less than the proceeds reported by TradeLog based on trade history (on the 1099 Reconciliation report this will show as a positive difference).

  Taxpayer options:

  1. File a footnote with Form 8949 to notify the IRS that the broker adjusted proceeds instead of cost basis for some wash sales on the 1099-B, or
  2. Do nothing, TradeLog has adjusted the wash sales on short sales based on IRS rules for Form 8949 and the 1099 reconciliation report from TradeLog is NOT sent to the IRS, therefore you may choose to take no additional action.

Have you seen a 1099-B problem not listed above? Submit an online support request and let us know!

2011 1099-B Problems

Below is a list of known issues or facts that we have had reported about various broker 1099-B reports. Please be aware of these factors if you are having difficulties reconciling your trade history. Remember, brokers have been asked to do something almost impossible in what they have to report, therefore there are many differences and some areas are matters of interpretation. Our goal is to help you be aware of why your 1099-B may report things they way it does, and try to help resolve reconciliation challenges.

Charles Schwab

• Charles Schwab does not segregate trades by covered and non-covered on the 1099-B. Nor do they provide totals of the reported cost basis for covered securities. This was not required by the IRS for 2011 reporting. Therefore you may need to go line by line through the sections to total up only covered security cost basis in order to get reconciliation totals. Schwab recommends that you export their RGL data from schwab.com into an Excel spreadsheet and manually add the covered/uncovered indicator from your 1099-B. You can then sort the data and subtotal it. Starting with tax year 2012, Schwab will segregate trades by covered and non-covered on the Form 1099-B.
• Schwab is also adjusting wash sale adjustments to the Sale price of short sales which triggered the wash. According to the guidance we have received - see references at the end of this note. IRS instructions for Form 8949 say wash sales always adjust the cost basis of a trade. This difference in adjustment may cause gross proceeds to not reconcile in TradeLog. (See Internal Revenue Code Section 1091, IRS Publication 550 p.60, and IRS 1099-B Instructions.) Unless the broker amends the 1099-B you will not be able to reconcile gross sales in TradeLog, it may be wise to file a footnote with your return explaining the difference to the IRS or to speak with a tax advisor on possibly adjusting the sales on Form 8949. Charles Schwab is aware of this matter and is reviewing their guidance. At this point in time we remind users that you are responsible for your final tax reporting being accurate, so please make needed decisions and adjustments accordingly.
• Schwab reports short sales that were entered into prior to 2011 and includes the sale amounts in the gross proceeds. When reconciling 1099-B TradeLog subtracts short sales prior to 2011 because most brokers do not report those (it was not required by the IRS). Therefore if you have a large negative discrepancy in gross proceeds/sales, check the amount of open short sales from the previous year that are being adjusted and that may account for the difference.

Etrade

• Etrade reports short sales that are closed at a loss as closed on the settlement date. This is correct according to IRS Publication 550. If you have a short sale that closed in the last few days of the year, it likely didn't settle until the next year. If the close created a loss, then you need to adjust the close date in TradeLog to match the settlement date.
• Etrade is adjusting sales for option premiums. However we have seen where they did not do this if the sale was an uncovered trade. This may cause some discrepancy in gross proceeds reconciliation (usually a positive difference).

Fidelity

• Fidelity does not segregate trades by covered and non-covered or short-term and long-term, rather they report in one combined section. Nor do they provide totals of the reported cost basis for covered securities. This requires clients to manually go through reporting line by line to total up the reported cost basis numbers for reconciliation purposes. We recommend clients contact Fidelity and ask if they can provide them with the total cost basis numbers reported to the IRS for short-term and long-term securities. Otherwise you will need to go line-by-line to add these up in order to be able to reconcile the cost basis with TradeLog.
• Fidelity is also adjusting wash sale adjustments to the Sale price of short sales which triggered the wash. This is incorrect based on all guidance we have received from the IRS. The IRS says wash sales always adjust the cost basis of a trade. This causes gross proceeds to not reconcile in TradeLog. (See Internal Revenue Code Section 1091, IRS Publication 550 p.60, and IRS 1099-B Instructions.) Unless the broker amends the 1099-B you will not be able to reconcile gross sales in TradeLog, it may be wise to file a footnote with your return explaining the difference to the IRS.
• Some ETFs are reported as both covered and non-covered by Fidelity as a result of CUSIP changes. This may require users to force code some of the trades to report on the correct form.

Interactive Brokers

• Interactive Brokers adjusts gross sales for option premiums, if you had exercised options please make sure and check that box in the 1099-B Details in TradeLog.
• For Interactive Brokers clients who have trades in foreign currencies, we are not clear how IB is reporting currency conversion for each trade on the 1099-B. We have seen small differences that can affect reconciliation.
• Interactive Brokers appears to be reporting the date of short sales as the same date of the buy to cover, this can make it difficult to understand their 1099-B and may also affect wash sales and holding period.

OptionsXpress

• We have seen examples where OptionsXpress has duplicated all or many of the trades reported on the 1099-B. A new 1099-B needs to be requested in such cases.
• In some cases OptionsXpress is also adjusting wash sale adjustments to the Sale price of short sales which triggered the wash. This is incorrect based on all guidance we have received from the IRS. The IRS says wash sales always adjust the cost basis of a trade. This causes gross proceeds to not reconcile in TradeLog. (See Internal Revenue Code Section 1091, IRS Publication 550 p.60, and IRS 1099-B Instructions.) Unless the broker amends the 1099-B you will not be able to reconcile gross sales in TradeLog, it may be wise to file a footnote with your return explaining the difference to the IRS.

Penson

• We have seen examples where Penson reported securities as not-covered which, by all IRS definitions, should be covered. We are not sure why. If you have this occur please contact Penson or your broker and have them check if the 1099-B is correct and why.
• For some accounts Penson reported short sales incorrectly - listing the sale amounts in the cost basis column, and the cost basis in the sale price column, this causes the resulting wash sale adjustments they make to be incorrect also. If this occurs you must request your broker to amend the 1099-B or else their reporting to the IRS will not correctly represent either your sales or cost basis.

TD Ameritrade

• TD Ameritrade reports most ETFs as covered, however some ETFs may be reported as uncovered and thus should be adjusted in TradeLog.

TradeStation

• Many TradeStation users have reported that they had major discrepancies on the 1099-B and after contacting TradeStation they were informed that they are scheduled to receive an amended 1099-B. Before spending too much time reconciling discrepancies you may want to contact TradeStation to see if you are scheduled for such an amendment.
• TradeStation is adjusting wash sale adjustments to the Sale price of short sales which triggered the wash rather than the cost basis. This causes gross proceeds to not reconcile in TradeLog. (See Internal Revenue Code Section 1091, IRS Publication 550 p.60, and IRS 1099-B Instructions.) Unless the broker amends the 1099-B you will not be able to reconcile gross sales in TradeLog, it may be wise to file a footnote with your return explaining the difference to the IRS. Typically if this is occurring in your account you will see more sales reported in TradeLog than on the 1099-B.
• TradeStation is often reporting all short sales as covered on the settlement date regardless of whether the trade closed at a gain or a loss. The IRS says that only short sales that close at a loss are reported on the settlement date for Form 8949. If you have short sales that were covered in the last few days of the year it is possible that TradeStation did not report them for that tax year and this can cause TradeLog to report more sales than TradeStation. (See IRS Publication 550 p. 59).

Have you seen a 1099-B problem not listed above? Submit an online support request and let us know!