Form 1099-B field reference
Form 1099-B Box 1e: Cost or other basis
Form 8949 destination
Column (e) — Cost or other basis
Reconcile this field with the rest of the transaction before calculating gain or loss. A Form 1099-B label does not override the official basis, holding-period, or adjustment rules.
Before filing
What to check
- Compare broker basis with purchase and transfer records.
- Include reinvested distributions and basis adjustments supported by records.
- Use Form 8949 adjustment codes and amounts when correcting reported basis.
How it works
Box 1e mechanics
Box 1e is frequently the single most error-prone field on the entire 1099-B, and it's worth treating a populated figure as a starting point rather than a final answer. Reinvested dividends and capital-gain distributions create new basis lots every time a distribution buys additional shares, and a broker that doesn't track every reinvestment correctly — particularly after an account transfer between firms — can understate basis and overstate gain. Wash sale disallowed losses under IRC §1091 get added to the basis of the replacement shares, so a wash sale that isn't properly linked to its replacement lot leaves basis too low. Return-of-capital distributions reduce basis gradually over the holding period instead of being taxed as ordinary income when received, which is easy to miss if the reduction wasn't applied year by year. A blank Box 1e most often means the security is noncovered (see Box 5), not that basis is zero — brokers are not required to report basis for noncovered securities at all.
Worked example
An investor reinvests $500 of dividends into additional mutual fund shares over several years, then sells the entire position. If the broker's Box 1e basis doesn't include all of the reinvested-dividend lots — common after an account transfer between brokers — the investor needs to add records of every reinvestment to the broker-reported basis before filing, or the sale will overstate gain.
Box 1e FAQs
If Box 1e shows a basis figure, is it always correct?
Not necessarily. Transferred accounts, dividend reinvestments, wash sales, and corporate actions are common sources of broker-basis errors even on covered securities where basis reporting is required.
What if my basis differs from what the broker reported to the IRS?
Use the Form 8949 adjustment code and column (g) to reconcile the broker-reported basis to your verified, correct basis, and keep the records that support the correction.