Page 6 of 12 Fileid: … ions/i8949/2023/a/xml/cycle07/source 16:16 - 11-Jan-2024
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
You didn't receive a Form 1099-B or 1099-S (or substitute
statement). If you didn't receive a Form 1099-B or 1099-S (or
substitute statement) for a transaction, enter in column (d) the
net proceeds. The net proceeds equal the gross proceeds minus
any selling expenses (such as broker’s fees, commissions, and
state and local transfer taxes). If you sold a call option and it was
exercised, you adjust the sales price of the property sold under
the option for any option premiums (as instructed under
Gain or
Loss From Options in the Instructions for Schedule D (Form
1040)).
You received a Form 1099-B or 1099-S (or substitute state-
ment). If you received a Form 1099-B or 1099-S (or substitute
statement) for a transaction, enter in column (d) the proceeds
shown on the form or statement you received. If there are any
selling expenses or option premiums that aren't reflected on the
form or statement you received (by an adjustment to either the
proceeds or basis shown), enter “E” in column (f) and the
necessary adjustment in column (g). See the example under
Column (g)—Amount of Adjustment, later.
If the proceeds you received were more than shown on Form
1099-B or 1099-S (or substitute statement), enter the correct
proceeds in column (d). This might happen if, for example, box 4
on Form 1099-S is checked.
You shouldn't have received a Form 1099-B (or substitute
statement) for a transaction merely representing the return of
your original investment in a nontransferable obligation, such as
a savings bond or a certificate of deposit. But if you did, report
the proceeds shown on Form 1099-B (or substitute statement) in
both columns (d) and (e).
Column (e)—Cost or Other Basis
The basis of property you buy is usually its cost, including the
purchase price and any costs of purchase, such as
commissions. You may not be able to use the actual cost as the
basis if you inherited the property, got it as a gift, or received it in
a tax-free exchange or involuntary conversion or in connection
with a “wash sale.” If you don't use the actual cost, attach an
explanation of your basis.
The basis of property acquired by gift is generally the basis of
the property in the hands of the donor. The basis of inherited
property is generally the fair market value at the date of death.
See Pub. 551 for details.
If you elected to recognize gain on property held on January
1, 2001, your basis in the property is its closing market price or
fair market value, whichever applies, on the date of the deemed
sale and reacquisition, whether the deemed sale resulted in a
gain or an unallowed loss.
Schedule A to Form 8971—Consistent basis reporting. If
you received a Schedule A to Form 8971 from an executor of an
estate or other person required to file an estate tax return and
you are a beneficiary who receives (or is to receive) property
from that estate, you will be required to report a basis consistent
with the final estate tax value of the property if Part 2, column C,
of the Schedule A you received indicates that the property
increased the estate tax liability of the decedent. In this case,
first use an amount that is equal to or less than the final estate
tax value listed in Part 2, column E, of the Schedule A. This
amount is your initial basis in the property. You then adjust your
initial basis in the property, as described under
Adjustments to
basis, later. The resulting amount is entered in column (e) of
Form 8949.
If you received a supplemental Schedule A to Form
8971, use the most recently dated supplemental
Schedule A to determine your initial basis.
Penalties for inconsistent basis reporting. If you use an
initial basis that is more than the amount listed in Part 2, column
E, of the Schedule A to figure your basis in the property and Part
2, column C, of the Schedule A indicates that the property
increased the estate tax liability of the decedent, you may be
subject to a penalty equal to 20% of any resulting underpayment
of tax because the basis reported isn’t consistent with the final
estate tax value of the property.
For more details, see Pub. 551; Pub. 550; or the instructions
for Form 8971 and Schedule A, available at IRS.gov/Form8971.
Adjustments to basis. Before you can figure any gain (or loss)
on a sale, exchange, or other disposition of property, you must
usually make certain adjustments (increases and decreases) to
the basis of the property. Increase the basis of your property by
capital improvements. Decrease it by depreciation, amortization,
and depletion. Other adjustments may be necessary for your
property. See Pub. 551 for more information.
If you sold shares of stock, adjust your basis in each share,
but not below zero, by subtracting all the nondividend
distributions allocable to such shares that were received before
the sale and that reduced your cost (or other basis) in such
shares. Also, adjust your basis for any stock splits. See Pub. 550
for details. See
Form 1099-B and How To Complete Form 8949,
Columns (f) and (g), later, for the adjustment you must make if
you received a Form 1099-B (or substitute statement) and the
basis shown in box 1e is incorrect.
Increase the cost or other basis of a taxable OID debt
instrument by the amount of OID that you have included in gross
income for that instrument. See Pub. 550 for details.
Increase the cost or other basis of a tax-exempt OID debt
instrument by the amount of tax-exempt OID that accrued on the
debt instrument while held by you. See Pub. 550 for details.
If you elect to currently include in income the market discount
on a bond, increase the basis of the bond by the market discount
that has been included in income for that bond. See Pub. 550 for
details.
If you elect to amortize bond premium on a taxable bond,
reduce the basis of the bond by any bond premium amortization
allowed as either an offset to interest income or as a deduction
for that bond. Reduce the basis of a tax-exempt bond by any
bond premium amortization for that bond. See Pub. 550 for
details.
If a charitable contribution deduction is allowable because of
a bargain sale of property to a charitable organization, you must
allocate your basis in the property between the part sold and the
part contributed based on the fair market value of each. See
Pub. 544 for details.
For compensatory options granted after 2013, the basis
information reported to you on Form 1099-B (or substitute
statement) won’t reflect any amount you included in income
upon grant or exercise of the option. Increase your basis by any
amount you included in income upon grant or exercise of the
option. For compensatory options granted before 2014, any
basis information reported to you on Form 1099-B (or substitute
statement) may or may not reflect any amount you included in
income upon grant or exercise of the option; therefore, the basis
may need to be adjusted. If the basis information reported to you
on Form 1099-B (or substitute statement) doesn’t reflect an
amount you included in income upon grant or exercise of the
option, increase your basis by the amount you included in
income upon grant or exercise of the option. See Pub. 525 for
more information.
Solely for purposes of calculating a loss on the sale of the
stock of a specified 10%-owned foreign corporation, if a
corporate shareholder received an actual or constructive
dividend after December 31, 2017, and that dividend qualified
for the 100% dividends-received deduction, the shareholder
6
Instructions for Form 8949 (2023)