Form 1099-B box 1e: cost basis and wash sales for preparers
Form 1099-B box 1e is the cost or other basis a broker reports for securities sold. For covered securities the broker also reports it to the IRS (box 12 checked), and the preparer carries it to Form 8949 column (e) as shown, fixing any error with code B.
“If the property you sold was a covered security, its basis should be shown in box 1e on Form 1099-B or box 1g on Form 1099-DA (or substitute statement) you received from your broker.” IRS, Instructions for Form 8949 (2025)
What does Form 1099-B box 1e show?
Form 1099-B box 1e shows the cost or other basis of the securities sold, according to the 2025 Instructions for Recipient on Form 1099-B. The broker instructions call it adjusted basis: purchase cost adjusted for items such as wash sale losses carried in from an earlier sale, and the broker enters -0- only if the basis really was zero. When box 12 is checked, that basis was reported to the IRS as well as to the client.
Three adjustments in box 1e trip up preparers. For a noncompensatory option granted or acquired on or after January 1, 2014, box 1e already reflects the option premium. For shares acquired by exercising a compensatory option, box 1e does not include the income reported on Form W-2, so the preparer adds it with code B on Form 8949. And when box 5 is checked, the broker may leave box 1e blank, which leaves the basis to the client's own records.
Which securities are covered and noncovered on Form 1099-B?
A covered security is one for which the broker must report basis to the IRS, and the acquisition date decides it. The Instructions for Form 1099-B (2025) list stock acquired for cash in an account after 2010, stock eligible for the average basis method (such as mutual fund shares) acquired after 2011, certain debt instruments and options acquired after 2013, more complex debt instruments and options acquired after 2015, and securities futures contracts entered into after 2013. A security transferred in with a transfer statement showing it as covered stays covered.
Everything else is noncovered. For a noncovered sale the broker may check box 5 and leave boxes 1b, 1e, 1f, 1g and 2 blank, or fill them in voluntarily without penalty. The checkbox that matters for Form 8949 is box 12: when it is checked, the sale goes on a box A or box D page; when it isn't, the sale goes on box B or box E, even if a basis figure appears in box 1e.
| Security | Form 1099-B | Form 8949 box |
|---|---|---|
| Covered, short term | Box 1e filled, box 12 checked | A |
| Covered, long term | Box 1e filled, box 12 checked | D |
| Noncovered, short term | Box 5 checked; box 1e may be blank | B |
| Noncovered, long term | Box 5 checked; box 1e may be blank | E |
| Holding period unknown to broker | Code X in the Applicable checkbox | B or E, from client records |
How do wash sales show up in Form 1099-B box 1g?
Form 1099-B box 1g shows the loss on a sale that the wash sale rule disallows. A wash sale happens when stock or securities are sold at a loss and, within 30 days before or after, the taxpayer buys substantially identical stock or securities, acquires them in a fully taxable trade, enters into a contract or option to acquire them, or acquires them for an IRA or Roth IRA, per the Schedule D instructions (2025).
The broker's duty is narrow. The 1099-B instructions require a box 1g amount only when both trades are in the same account, involve covered securities and have the same CUSIP number. A broker may report other wash sales, but doesn't have to, and the Schedule D instructions say a wash sale loss is still nondeductible even when the 1099-B doesn't show it. A reporting broker also adds the disallowed loss to the replacement shares' basis, which later shows up in box 1e. Their holding period follows section 1223(3), per the 1099-B instructions.
Where do Form 1099-B boxes 1e and 1g go on Form 8949?
Each Form 1099-B basis box has one place on Form 8949, set out in the Instructions for Form 8949 (2025). If box 12 is checked, the preparer keeps box 1e in column (e) even when it is wrong and fixes it with code B in column (g), using the instructions' Worksheet for Basis Adjustments. If box 12 isn't checked, the preparer enters the correct basis in column (e) and -0- in column (g).
| Form 1099-B box | Form 8949 | How |
|---|---|---|
| 1e, box 12 checked | Column (e) | Enter as reported; correct with code B in (g) |
| 1e, box 12 not checked or box 5 checked | Column (e) | Enter correct basis; code B and -0- in (g) if 1e was wrong |
| 1e blank (box 5) | Column (e) | Basis from the client's records, with an explanation if not cost |
| 1f accrued market discount | Code D, column (g) | Market discount worksheet |
| 1g wash sale loss disallowed | Code W, column (g) | Positive amount |
| 2 Ordinary box checked | Columns (f) and (g) | Exception 1 not available; code O may apply |
Box 1e pairs with box 1d proceeds on the same row. Box 1d is already reduced by commissions and transfer taxes, so those costs shouldn't be added to column (e) or entered again with code E. The full box-by-box map, including boxes 1a to 1d and the A to L checkboxes, is on the Form 8949 page.
What does a box 1e and wash sale example look like?
For example, Omar buys 100 shares of GHI for $10,000 on March 3, 2025 and sells them for $8,000 on June 10. On June 20 he buys 100 GHI shares again for $8,300 in the same account, so his broker reports a $2,000 wash sale in box 1g. He sells the new shares for $9,900 on November 14, 2025, and the broker reports $10,300 of basis in box 1e. He also sells 150 shares of JKL bought in 2009 for $6,000; that 1099-B has box 5 checked and box 1e blank, and his records show $4,200 of basis.
| Step | Form line | Gain (loss) |
|---|---|---|
| GHI lot 1: $8,000 minus $10,000, plus $2,000 code W | 8949 Part I, box A, (h) | $0 |
| Replacement basis: $8,300 plus $2,000 disallowed loss | 1099-B box 1e on lot 2 | $10,300 |
| GHI lot 2: $9,900 minus $10,300 | 8949 Part I, box A, (h) | ($400) |
| Short-term total | Sch. D 1b | ($400) |
| JKL: $6,000 minus $4,200 from Omar's records | 8949 Part II, box E; Sch. D 9 | $1,800 |
Over the year Omar lost $400 on GHI ($17,900 of proceeds against $18,300 of cash cost), and that is exactly what reaches Schedule D. Lot 2 stays short term because the tacked holding period still starts March 3, 2025.
What do reviewers check on Form 1099-B basis?
A reviewer checking Form 1099-B basis confirms six items, each tied to the Form 8949 or Schedule D instructions or the 1099-B itself. Pull every 1099-B for the client, not just the consolidated statement for the main account, since wash sales across accounts and into IRAs only show up when the trades are compared side by side. Then look for any lot with box 5 checked, because those need a basis source outside the 1099-B. For inherited or gifted shares, basis is generally fair market value at death or the donor's basis, and a beneficiary who received Schedule A (Form 8971) has to stay consistent with the estate tax value.
Net gains from these sales also feed Form 8960 line 5a for clients above the net investment income tax threshold.
Every line checked against the documents the client sent
Filed reads every Form 1099-B the client received, their W-2s and basis records, then checks each Form 8949 row against them. Anything that doesn't tie comes back as a review item with a citation to the source.
Book a demoForm 1099-B from the taxable account shows a $3,600 loss on 200 sh. MNO sold Aug. 4, 2025 with box 1g blank, and the IRA statement shows 200 sh. MNO bought Aug. 19, 2025. Confirm whether the $3,600 loss is disallowed and needs code W on Form 8949.
Common questions
What does it mean when box 1e is blank on Form 1099-B?
A blank box 1e on Form 1099-B usually means the security was noncovered and the broker checked box 5, which lets it leave basis off the form. The sale goes on Form 8949 with box B or box E checked, and the preparer enters basis from the client's own records in column (e), attaching an explanation if basis isn't cost.
Does box 1g include wash sales between different accounts?
Box 1g doesn't have to include wash sales between different accounts. The 1099-B instructions require brokers to report only wash sales of covered securities with the same CUSIP number in the same account. Brokers may report others voluntarily, but a loss disallowed by a purchase in another account or an IRA is still nondeductible, so the preparer adjusts it with code W.
What is a noncovered security on Form 1099-B?
A noncovered security on Form 1099-B is one the broker isn't required to report basis for, generally stock bought before 2011, most mutual fund and DRP shares bought before 2012, and debt, options and securities futures from before 2014. The broker may check box 5 and leave boxes 1b, 1e, 1f, 1g and 2 blank.
Sources
- IRS, Form 1099-B (2025), including Instructions for Recipient
- IRS, Instructions for Form 1099-B (2025)
- IRS, Instructions for Form 8949 (2025)
- IRS, Instructions for Schedule D (Form 1040) (2025)
- Treas. Reg. 1.6045-1, returns of information of brokers
- IRC section 1091, loss from wash sales of stock or securities