As required in the Regulations, when you sell covered securities we will report to the IRS not only the gross proceeds from the sale, but also the cost basis, the date of acquisition and whether any gain or loss with respect to such securities is long-term or short-term.
"Covered security" describes investments for which financial institutions are required to report Cost Basis. Cost Basis Reporting Regulations took effect over a four-year phase-in period that began in 2011. During this period, different types of securities became "covered" and subject to new cost basis reporting.
A "covered" security refers to a security you have purchased on or after the effective date, such as equities including foreign securities and ADRs purchased on or after January 1, 2011; mutual funds on or after January 1, 2012; or fixed income, options and structured notes on or after January 1, 2014, are considered "covered". Not all securities are covered by these regulations. For example, Public Traded Partnerships (PTP) are not subject to cost basis reporting.
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.
Additional Information