The information provided on the Form 1099 does not necessarily determine one’s tax obligation and clients may need to make additional adjustments to determine their actual tax liability. Examples of such adjustments may include the following:
- IBKR does not report cost basis information for closing transactions involving non-covered securities which the client is obligated to report to the IRS;
- IBKR is not responsible for determining wash sales involving substantially identical securities (e.g., qualifying options and convertible bonds and preferred stock);
- IBKR does not have information regarding transactions a client makes at other brokers and which could impact wash sale computations;
Due to these and other differing reporting obligations of the taxpayer and the broker, it is ultimately the taxpayer’s responsibility to correctly reconcile any differences in basis and proceeds and to accurately report to the IRS.
IBKR also offers tax-advantaged account types for clients who are U.S. citizen, such as IRA accounts. Please click here to learn more about these account offerings.
Note
- The above information is not intended as tax guidance or advice and clients should consult with a qualified tax advisor for any tax related matters.