1099 FAQs


All US legal residents as well as any customer who has provided Interactive Brokers with a US Tax Payer Identification Number will receive a 1099 form, which is composed of 5 parts. All reports and statements will be available on our website under Account Management/Statements. The following information is provided to give you a general understanding of the various tax forms, but for specific guidance you are encouraged to seek the advice of a professional advisor.

What is Form 1099-B?
Titled "Proceeds from Broker and Barter Exchange". This form reflects all proceeds received from SELL trades in STOCKS only and will be reported in Box 2. This includes sell trades resulting from the exercise or assignment of stock options. Buy trades are not reflected in the 1099B. The 1099B form is not a reflection of capital gains or Profit & Loss (P&L). It is the customer's responsibility to calculate gains or losses. No option trade information is included on the 1099B. Commissions have been deducted from the trade proceeds reported on the 1099B.

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What is 1099 for Futures?
Titled "Substitute Composite Statement of 1099 Forms". This form reflects profit and loss from futures. Box 1a reports realized profit and loss for the year from futures, while box 1b displays realized profit and loss after 5/5/2003 when the new 15% capital gains tax was applied. Box 2a and 2b display aggregate profit and loss from futures using the same criteria as boxes 1a and 1b respectively. Box 3 shows interest income from futures, and box 4 displays commissions paid for futures transactions (commissions are not subtracted from boxes 1 and 2).

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Where can I find my Profit and Loss for the year?
The 1099B lists the total sales proceeds of all of your stock sales.  In order to figure out your profit and loss for the year, use the monthly or annual confirmation statements located in the Statements and Downloads section of your Account Management Menu. We have formatted the monthly confirmation statements in MS Money, Quicken, or you can use an Excel Spreadsheet to help with your calculations.  If you have trouble with downloading your statements, please contact the Technical Assistance Center at 1-877-442-2757, and press 4.

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What is the Realized Profit and Loss on the 1099 for Futures transactions?
It is the actual number, which represents the total profit or the total loss for the all future products, which includes futures contracts, futures options, and single stock futures.

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How do I get my 1099 if I am unable to log into my Account Management Menu?  
Contact our Customer Service Department, and advised service agent that you are not able to log into the Account Management Menu.

  1. If you have your username, we will ask a series of security questions for identity verification, once the information has been verified, our customer service department will establish a temporary password in order for you to gain access.
  2. If you do not have your username, we will require you to send additional information to our new accounts department in order to verify your identity. Please be advised that this process may require additional processing time to complete the verification process.

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What must I do if my 1099 form is not included in the Statements and Downloads section of my Account Management menu?
First, you must determine if you are missing the futures 1099 form or the equities 1099 form. Next, you must verify that you sold shares of stock during the previous tax year for equities, and verify that you bought or sold futures contracts during that same period. Once you have reviewed your trading activity from the previous tax year, and, if you have determined that the above described transactions applies to you, then, you must contact our customer service department with specific details of those transactions, which includes the name of the security, number of shares/contracts, and the trade date. We will research the issue and will advise your once we have concluded our investigation.

As a reminder, Interactive Brokers does not report transactions to form 1099 resulting from options on futures contracts, equities, and index options contracts. In addition, we do not report the purchase of equity securities, and capital gains or Profit & Loss (P&L). 

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Where can I find more descriptive information regarding your 1099’s?
You may find more information on our website by clicking here on Tax Instructions.

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What is included in the gross proceed number on my equity 1099B?
Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, is the federal information form used to report the proceeds received from the sale of securities during the current year.

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Does the gross proceeds value in my 1099B include commissions?
The gross proceeds value is minus commissions.

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Why did I receive Form 1099-B, and where do I report the information?
Whenever you sell shares, you generally have a taxable transaction that must be reported to the IRS. The proceeds from these transactions are reported to you on Form 1099-B. These transactions must be reported on IRS Form 1040, U.S. Individual Income Tax Return, Schedule D, Capital Gains and Losses.

Additional information on reporting gains and losses, including determining the cost basis, can be obtained by reading IRS Publications 544, Sales and Other Dispositions of Assets, and 551, Basis of Assets.

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Does Interactive Brokers send the IRS a copy of my 1099?
Yes, IB sends an electronic file to the IRS with same information that was provided to you by IB on form 1099.

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What is Form 1099-DIV?
Titled "Dividend Income". Box 1a, "Ordinary Dividends", lists the total dividend payments credited to your account over the course of the calendar year for your securities account. Box 1b, "Qualified Dividends", displays dividends that qualify for the new 15% capital gains rate and excludes: dividends paid from exempt organizations, dividends of a mutual savings bank, and Section 404K dividends. Dividends that were debited due to short positions are not reflected on this form. Box 6, "Foreign Tax Withheld," is the foreign withholding tax usually related to dividends paid on American Depository Receipts (ADRs) or on foreign ordinary shares trading in the U.S. The country to which the tax was paid is listed in Box 7. If the IRS notified us that backup income tax must be withheld on dividends, this would be reported in Box 4.

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What happens if I receive Form 1099-DIV that includes income that needs to be reported by other taxpayers?
If you receive Form 1099-DIV that includes income attributable to other taxpayers under other Taxpayer Identification Numbers, you will need to follow the IRS guidelines for "Nominees." Please refer to the 2002 Instructions for Form 1040, U.S. Individual Income Tax Return, Schedule B, Interest and Ordinary Dividends, and to IRS Publication 564, Mutual Fund Distributions, for more information. IRS forms, instructions and publications can be obtained free of charge by calling the IRS at 800/829-3676 (800/TAX FORM). You may also view these materials on the IRS website.

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What IRS form(s) do I use to report their Form 1099-DIV tax information?
Generally, individual investors will need to report Form 1099-DIV information on IRS Form 1040, U.S. Individual Income Tax Return. Depending on the type of information reported on your Form 1099-DIV, you may need to include with Form 1040 additional forms such as Schedule A & B, Interest and Ordinary Dividends and/or Schedule D, Capital Gains and Losses. IRS forms can be obtained free of charge by calling the IRS at 800/829-3676 (800/TAX FORM). You may also view forms on the IRS website.

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What are short-term capital gains?
Short-term capital gains are capital gains earned on the sale of securities held for 1 year or less. When a (ETF) Exchange Traded Fund declares a distribution of net short-term capital gains, this amount will be distributed and reported to you as an Ordinary Dividend in column 1 of Form 1099-DIV, Dividends and Distributions, and is taxable at ordinary income tax rates.

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What are long-term capital gains?
Long-term capital gains are capital gains earned on the sale of securities held for more than 1 year. Net long-term capital gains are taxed at favorable tax rates.

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What are ordinary income dividends?
Ordinary income dividends are dividends paid by both open end and closed end mutual funds from its corporate bond interest earnings, corporate dividend income and other types of earnings. Ordinary income dividends, along with any distributions of net short-term capital gains, are reported to shareholders as Ordinary Dividends in column 1 of Form 1099-DIV, Dividends and Distributions.

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What is Form 1099-R?
Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., is the federal information form used to report distributions made to you from your retirement accounts, including an IRA or Coverdell ESA.

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What is Form 5498?
Form 5498, IRA, and Coverdell ESA Contribution Information, is the federal information form used to report contributions and rollovers to Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs and Coverdell ESAs for which Trustar is custodian. Form 5498 will be mailed to contributors by May 2003.

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What is U.S. withholding of tax on nonresident aliens and foreign corporations?
Withholding required under federal and international (treaty) law is imposed on all ordinary dividends (including short-term capital gain distributions) paid to nonresident aliens and foreign corporations or other foreign entities.

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Where is the foreign tax sent?
Interactive Brokers deposits foreign tax withheld with the U.S. Treasury.
Shareholders may claim a refund of tax withheld from the U.S. Treasury by filing Form 1040NR, U.S. Nonresident Alien Income Tax Return, or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents. More information can be found in the instructions for Forms 1040NR and 1040NR-EZ, IRS Publication 901, U.S. Tax Treaties, and Publication 519, Tax Guide for Aliens.

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If I completed a W-8 form and I am not a legal resident of the United States will I receive a 1099?
If you are not a US legal resident, or qualify to receive a 1099 form, you may not receive a 1099 form. However, you may receive form 1042S. This form reports dividend income received on US stocks for foreign investors.

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What is Form 1042-S?
Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, is the federal information form used to report account information on accounts held by nonresident aliens, foreign corporations and other types of foreign entities. Information such as distributions of ordinary income dividends and short- and long-term capital gains, the tax withholding rate, and the amount of U.S. tax withheld and deposited is reported on Form 1042-S. The form is located in the Statements and Download section of your Account Management Menu on our website.

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What are Forms 1040NR and 1040NR-EZ?
Form 1040NR, U.S. Nonresident Alien Income Tax Return, and Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents, are the income tax returns used by nonresident alien individuals. They are also the income tax returns used by foreign estates and foreign trusts.

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What is foreign tax paid?
Many countries impose a tax on income earned by entities (including mutual funds) domiciled outside the country. A foreign country generally withholds the tax at the time a U.S.-domiciled entity (including a mutual fund) receives the income.

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Would I take the foreign tax paid as a foreign tax credit or as a deduction?
Treatment as a foreign tax credit or as a deduction will depend upon the personal tax situation of each individual shareholder. Please see the Foreign Tax Credit information in the 2003 Tax Information Handbook for more information on foreign tax credits generally, and on simplified tax credit reporting you may be able to use on your return. The Instructions for Form 1116, Foreign Tax Credit, and IRS Publication 514, Foreign Tax Credit for Individuals, also provide additional information on this subject. Please consult your tax advisor for any additional information and for the appropriate treatment in your case.

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What is a Return of Capital?
A distribution paid to fund shareholders in excess of a fund's current and accumulated earnings and profits is a return of capital (ROC) distribution. A ROC distribution is generally nontaxable and reduces a shareholder's cost basis in the fund. If a ROC distribution exceeds a shareholder's cost basis, then any additional amount is treated as a capital gain.

ROC distribution example: A shareholder buys 1 share of Fund A for $10. In 2003, Fund A pays a $1 per share ROC distribution. The shareholder's cost basis in Fund A after the ROC distribution is $9 per share ($10 initial investment less $1 ROC distribution).

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How do I know if my account had a Return of Capital (ROC)?
A fund will report ROC distributions to shareholders as nontaxable distributions in Form 1099-DIV, Dividends and Distributions.

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What is a wash sale?
If you sell a security (including mutual fund shares) at a loss and purchase a "substantially identical security" within 61 days (either 30 days before or after the sale), you may have created a "wash sale."

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What are the tax consequences of a wash sale?
You cannot deduct losses from wash sales. If the wash sale rules apply, all or a portion of the loss is added to the cost basis of the repurchased shares and will be reflected in the calculation of gain or loss when these shares are sold. If you think you may have entered into a wash sale, please consult your tax advisor for more information.

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What is the corporate dividend received deduction (DRD)?
The Internal Revenue Code allows a corporation to deduct 70% of dividend income received from a domestic corporation. Dividend income received by mutual funds from domestic corporations qualifies for this deduction. The percentage of ordinary income dividends qualifying for the corporate DRD can be found in the Tax Designation section of your fund's annual report.

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Are equity and index option transactions reportable on 1099’s?
No. These figures are not required to be reported. Please consult your tax advisor for more information.

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What is Form 1099-INT?
Forms 1099-INT reports interest income and interest expense you received from your securities account. Box 1 of the form reports the interest income and the total interest over the course of the year. Box 5, labeled “Investment Margin Interest Expense”, is the total interest amount debited from your account over the course of the calendar year. If the IRS notified us that backup income tax must be withheld on interest income, this would be reported in Box 4.

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The 1099-B that I received is incorrect.  How can I get this corrected?
Send an email to help@interactivebrokers.com with “1099” in the subject of your email. Please include your full name, and account number, and the reason you believe there is a discrepancy.  In addition, please include what you feel is the correct amount, and specific details on your calculations of what you believe should be reported. We will research the issue and will advise your once we have concluded our investigation.

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The 1099-R that I received is incorrect.  How can I get this corrected?
Send an email to help@interactivebrokers.com with “1099R” in the subject of your email. Please include your full name, and account number, and the reason you believe there is a discrepancy.  We will research the issue and will advise your once we have concluded our investigation.

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What is Form 1099-MISC?
Titled "Miscellaneous Income". This form reflects gross fee income paid to advisors and gross commissions paid to introducing brokers and is reported in Box 7.

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What information is provided for Canadian Tax Reporting?
All legal residents of Canada will receive a Form T5 and T5008 by February 28, 2005.

Form T5 - Titled "Statement of Investment Income". This form details interest and dividends. Interest from Canadian sources is in Box 13, Foreign Dividends in Box 15, and Foreign Taxes Withheld in Box 16.

Form T5008 - Titled "Statement of Securities Transactions". A separate T5008 will be provided for stocks, options, and futures. SHS (stocks), OPN (options), FUT (futures) will be specified in Box 15, the number of shares or contracts for the year in Box 16, and the gross proceeds less commissions in Box 21

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Why did I receive a Form 1099 for the amount that I received from a deceased/divorced person's account?
The IRS requires us to report all assets received by an individual from an account due to death or divorce.

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Why am I receiving a 1099-R form on a distribution from my employer's retirement plan that was rolled directly into an IRA?
This is called a direct rollover. We are required to report the assets leaving the employer plan on Form 1099-R. Your successor trustee is required to report a rollover contribution of the same assets on IRS Form 5498. You may want to contact them to ensure that they will be reporting the rollover properly.

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Why did I receive a 1099 for my rollover from one IRA to another IRA? A rollover occurs when money is distributed from one tax-deferred account and deposited within 60 days to another tax deferred account. Although the distribution is considered taxable, the trustee of the receiving IRA will issue a Form 5498 in May. That form tells the IRS that you deposited the money into another IRA.

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Why has "Taxable amount not determined" been checked in Box 2b and yet there is an amount listed in Box 2a as the "Taxable amount"?
The IRS requires that we report the full amount of your IRA distribution in Box 1 (Gross distribution) and in Box 2a (Taxable amount) of Form 1099-R. However, we do not know if you have made any non-deductible (after-tax) contributions to this IRA account, therefore, we indicate in Box 2b the "Taxable amount not determined". Please consult your tax advisor or legal counsel to determine if you have made non-deductible (after-tax) contribution to your IRA account, which may lower your taxable amount.

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Why is my refund of an over-contribution from my ESA being reported on Form 1099-Q?
The IRS requires us to report all assets removed from an (ESA) Educational Savings Account. Because contributions to an ESA are not deductible, only the earnings are taxable. The IRS does not require the use of tax codes on Form 1099-Q.

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What is the Year-End Annual Statement?
Interactive Brokers will provide a year-end annual statement for 2003 consolidating all account activity for the entire year in one statement. This statement is provided as a convenience to our customers and is a consolidation of your monthly statements. Your annual statement will specifically highlight transaction detail that was reported on the 1099, 1042S, and T5/T5008 as these tax reports will only provide consolidated information.

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I already filed my taxes and did not report this amount. What do I do now?
You will have to file an amended return that includes the information reported on Form 1099. Consult your tax or legal advisor for further information.

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How do I reach the Internal Revenue Service (IRS)?
For questions or to request federal tax forms, call 800/829-3676 (800/TAX-FORM), or visit the http://www.irs.gov/.

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