Form 1099-B field reference
Form 1099-B Box 5: Noncovered security
Form 8949 destination
Usually box B (short-term) or E (long-term)
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
- Reconstruct basis from your own records.
- Confirm short-term versus long-term treatment.
- Use the Form 8949 category that matches both holding period and IRS basis-reporting status.
How it works
Box 5 mechanics
Covered-security basis reporting phased in gradually rather than all at once: most publicly traded equities became covered for shares acquired starting in 2011, mutual fund and dividend-reinvestment-plan shares followed in 2012, and most bonds, options, and other debt instruments followed in 2014, under the broker basis-reporting rules enacted by IRC §6045(g). Anything acquired before the applicable phase-in date for its asset type is noncovered, which is the most common reason Box 5 is checked. It isn't the only reason, though — certain gifted, inherited, or transferred-in positions can still be noncovered even on recent purchases if the basis information wasn't properly conveyed from the prior broker or account. A checked Box 5 does not reduce or eliminate the tax owed; it only shifts the basis-reporting burden from the broker to the taxpayer, who still needs to reconstruct and report the correct basis from personal records.
Worked example
100 shares purchased in 2009 — before the 2011 equity phase-in — are sold in 2025. Because the shares are noncovered, Box 5 is checked and the broker reports gross proceeds only. The taxpayer supplies the original 2009 purchase records to establish basis and reports the sale on Form 8949 category B or E depending on the holding period.
Box 5 FAQs
Does a noncovered security mean I don't have to report the sale?
No. You still must report the transaction and pay tax on any gain. Noncovered only means the broker isn't required to report basis to the IRS on your behalf.
Can a security be noncovered even if I bought it recently?
Yes. Certain gifted, inherited, or transferred-in positions can be noncovered if the basis information wasn't properly conveyed to the current broker, regardless of the general phase-in dates for that asset type.