1099-B Proceeds From Broker and Barter Exchange Transaction

1099B reporting is made up of three separate forms:

  • Covered securities with short-term gains or losses.
  • Covered securities with long-term gains or losses.
  • Uncovered securities. 
  Covered Securities Uncovered Securities
Broker/dealer vs. Tax Payer Responsibility Brokers/dealers report cost basis to IRS and taxpayer on Form 1099-B. Taxpayer will use From 1099-B data to prepare their tax returns. Taxpayer to maintain and report cost basis to IRS.
Equities Acquired on or after January 1, 2011 Acquired prior to January 1, 2011
 
Mutual Funds Acquired on or after January 1, 2012 Acquired prior to January 1, 2012
Fixed Income and options Acquired on or after January 1, 2014 Acquired prior to January 1, 2014

Reminders:

  • Bond and option purchases became covered securities as of January 1, 2014.
  • The details for each 1099B transaction is presented in your Form 8949 worksheet. This provides all the details  for each transaction in the format that is required for tax reporting. In addition, transactions not reported to  the IRS on Form 1099B, for example option sales in 2013, are included on this worksheet.
  • Each of these reports is specific to the account associated with the report, however the tax code requires you to report on your tax return across all of your accounts. If you hold the same security in multiple accounts and sell it, the gain or loss calculated and reported to the IRS may be different than presented on an account level and must be adjusted.

1099-MISC Miscellaneous Income

Line 2 Royalties: Payments of royalties are generally from investments in natural resource companies.

Line 3 Other income: Stock loan fees earned.

Line 8 Substitute payments in lieu of dividends and interest (PIL). Substitute payments of interest and dividends replace the normal interest or dividend payment when your security is lent.

Remember: These payments cannot be “netted” with PIL paid on stocks you have borrowed. They also are not  interest or dividend payments, but are miscellaneous income and should be treated as such on your tax return. PIL  received in lieu of a dividend payments are not eligible to be treated as qualified dividends except under specific  circumstances.

1099-DIV Dividend Income

Line 1a: All dividends received.

Remember: Money Market funds pay dividends rather than interest.

Line 1b: This line reports the amount ELIGIBLE for qualified dividend treatment. Qualified dividends are taxed at the Long-term Capital Gain (LTCG) tax rate (0%, 15%, & 20%).

Remember: The security paying the dividend must be long in your account for at least 61 days including the date of dividend record to be treated as a qualified dividend. The amount in this box does not consider holding period. Information concerning this is on the dividend report.

Line 2a: Long-term capital gain distributions – Usually from mutual funds. Reported on schedule D of return and are taxed at the long-term capital gain rate.

Line 2b: Un-recaptured sec. 1250 gain.

Line 3: Non-dividend distributions – Return of capital.

Line 5: Investment expenses – Expenses of a nonpublicly offered regulated investment company, generally a nonpublicly offered mutual fund. These expenses may be deductible on the “Other expenses” line on Schedule A (Form 1040) subject to the 2% miscellaneous itemized deduction limitation.

Line 6: Foreign tax paid – Foreign tax withheld at the source on dividend payments.

Lines 8&9: Liquidation distributions - Usually from mergers or acquisitions.

Line 10: Exempt Interest dividends - Generally dividends paid by tax-exempt bond funds.

Line 11: Amount on line 10 used to calculate AMT. Please see explanation in 1099-INT.

Please see more details in Dividend Report.


All IRS forms are available free of charge at www.IRS.gov/formspubs or by calling the IRS at
800.829.3676 (800-TAX FORM)

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Circular 230 Notice:
Important: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

1099-INT Interest Income

Line 1 reports interest income, exclusive of U.S. savings bond and U.S. Treasury obligations interest. Interest from U.S. savings bonds and US Treasury obligations is reported in Line 3. If the IRS has notified us that income tax must be withheld on interest income in your account, tax withheld amount will be reported in Line 4.

Interest payments details are part of the supplemental information on the Consolidated 1099.

US savings bond and treasury obligation interest is separated for state tax reporting. Interest on these obligations is generally not subject to state tax.

Tax-exempt interest (Line 8): Generally not subject to federal taxation. If you own municipal bonds, then interest on bonds from your home state is generally not taxed in your home. However, municipal interest from other states is taxed in your home state.

Line 9: Some interest paid by muni bonds is subject to AMT (Alternative minimum tax), amount in box 9 is the amount by which you adjust your taxable income to calculate AMT tax on form 6251.

Accrued interest paid: Provided in supplemental information on consolidated 1099 – reduce the amount of reported interest by interest paid.

 

Circular 230 Notice:
Important: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Remember: Interest income cannot be reduced by accrued interest paid until the first interest on the same security is received. If a bond with accrued interest paid is purchased in December and the first interest payment is in March, accrued interest paid must be carried over into the following year.

Tax Reporting: When are 1099s and other tax forms issued?

For U.S Persons

Consolidated 1099:        On or before February 15
Form 1099-R:               On or before January 31 every calendar year
Form 5498:                  No later than May 31 of each calendar year.
Form 2439:                  90 days after fiscal year end of RIC or REIT (On March 31 for December 31 year-end)
NR-4 (Canadian form):   On or before March 31 for the immediately preceding year.
 
For Non-U.S persons (Nonresident Alien)
1042S:                       On or before March 15 every calendar year
NR-4 (Canadian form):   On or before March 31 every calendar year
 
For Canadian Persons
T-5                          On or before February 28 for the immediately preceding year
T-5008                     On or before February 28 for the immediately preceding year
RL-3                         On or before February 28 for the immediately preceding year
RL-18                       On or before February 28 for the immediately preceding year
T-3                         On or before March 31 for the immediately preceding year
RL-15                       On or before March 31 for the immediately preceding year
RL-16                       On or before March 31 for the immediately preceding year
1042S:                     On or before March 15every calendar year
 
Note: if these dates fall on a weekend on holiday, the form will be issued on or before the next business day.
 
Often IB receives information on dividends and return of capital after the consolidated 1099 is issued. If we amend your consolidated 1099 to reflect this new information, we will send you an e-mail alert to let you know that there has been a change. The changed 1099 will be marked “amended” with the date.  Please check periodically and reprint your latest consolidated 1099 when you prepare your taxes.

Normativa italiana riguardo imposte su capital gains

Tutti i redditi di natura finanziaria percetpiti da investitori residenti in Italia persone fisiche sono soggetti all’applicazione di una singola aliquota del 20% (decreto legge 138/2011 e legge di conversione 148/2011). Tale regola generale non si applica a redditi derivanti da investimenti in titoli pubblici italiani (obbligazioni e altri titoli di cui all’art.31 DPR 601/1973) ed equiparati e derivanti da titoli pubblici di Stati esteri appartenenti alla cosidetta White List. Per questi prodotti continua ad applicarsi l’aliquota del 12,5% (ottenuta applicando l’aliquota del 20% a una base imponibile ridotta al 62,5%).   

La legge italiana impone la trattenuta alla fonte su ETFs che sono organismi di investimento collettivo del risparmio (OICR), cosí come sono tutti gli ETF al momento quotati sul mercato ETFPLus di Borsa Italiana.  
  • Ritenuta del 20% su ETF quotati alla Borsa Italiana (simbolo mercato di IB: BVME.ETF) è trattenuta alla fonte. 

L’imposta sui capital gains su azioni è applicata come segue: 

  • I clienti residenti in Italia (o aventi Italia come Paese di costituzione, in caso di conti in nome di società) che negoziano in azioni sono soggetti ad imposte sui capital gains.  Poichè IB applica solamente il Regime Dichiarativo, IB non è tenuta a trattenere alla fonte tali imposte direttamente dai conti dei clienti. I clienti sono responsabili di consultare un commercialista con riferimento ai propri obblighi dichiarativi secondo la legge italiana.

Borse disponibili per il mercato italiano presso IB:

  • BVME: disponibile per tutti i clienti IB per azioni italiane.
  • BVME.ETF: ETFs che sono organismi di investimento collettivo del risparmio (OICR) quotati al mercato ETFPlus non sono disponibili per residenti in Italia.

 

Italian regulations on capital gain taxes

All financial income received by an Italian resident individual investor will be subject to a tax rate of 20% (decreto legge 138/2011 and coordinated conversion law 148/2011). This general rule does not apply to financial income from investments in Italian Government securities (bonds and other securities pursuant to art. 31 DPR 601/1973) and equivalent products resulting from Government securities of foreign states belonging to the White List. These products shall continue to be subject to a reduced tax rate of 12.5% (20% flat rate, eligible for a discount of 37.5%).

Italian tax laws impose the withholding at source on ETFs that are collective investment schemes (UCITS). This designation is applicable to the ETFs currently listed on the Italian Stock Exchange Market ETFPlus.

  •  Withholding rate of 20% for ETFs listed on the Italian Stock exchange market (IB market symbol: BVME.ETF) is taxed at source.

Tax on capital gains for stocks is applied as follow:

  • Customers with Italy as their country of residence (or as country of incorporation in case of entity accounts) who are trading in stocks are subject to capital gain tax. As IB applies the Regime Dichiarativo only, IB is not required to withhold capital gain taxes from customer accounts directly. Customers would be responsible to discuss with their tax advisor on their individual reporting requirements in accordance with Italian laws. 

Available IB exchanges for Italian markets:

  • BVME: Available to all IB customers for Italian stocks.
  • BVME.ETF: ETFs that are collective investment schemes (UCITS) listed on the ETFPlus market are not available to Italian residents to trade. 

 

Information For IB Clients Relating to the Spanish Tax Form 720

Interactive Brokers wishes to supply the following information which may be useful for our Spanish residents when completing the newly required Form 720 for the Spanish Tax Authorities.


Interactive Brokers LLC, a US company, is the carrying firm for stocks held in IBLLC and IBUK client accounts. The US tax identification number (EIN) for IBLLC is 13-3863700. The address for the corporate headquarters of IBLLC is as follows:

One Pickwick Plaza
Greenwich, CT 06830
USA

For those clients holding metals, CFDs, non-US commodities and non-US index options, positions are held through Interactive Brokers UK Limited whose Company Registration Number is 03958476 and is located as follows:

1 Carey Lane, Fifth Floor
London EC2V 8AE
United Kingdom


 

 Bank details for USD in US for IBLLC accounts:
Citibank, N.A. (New York Branch)
111 Wall Street, 19th Floor
New York, NY 10043
United States of America
ABA-Nr. 021000089
BIC / Swift-Code: CITI US 33
Account-Nr. 30806988

Bank details for EUR in Germany for IBLLC accounts:
Citigroup Global Markets
Deutschland AG & Co
Reuterweg 16 60323
Frankfurt am Main / Germany
BLZ-Nr. 50210900
BIC / Swift-Code: CITI DE FF
IBAN-Nr. DE69502109000215520013

Bank details for USD in US for IBUK accounts:
Citibank, N.A. (New York Branch)
111 Wall Street, 19th Floor
New York, NY 10043
United States of America
ABA-Nr. 021000089
BIC / Swift-Code: CITI US 33
Account-Name. Interactive Brokers UK Ltd
Account-Nr. 30841265
 

Bank details for EUR in London for IBUK accounts:
Citibank, N.A. (London Branch)
Citigroup Centre
Canary Wharf, 33 Canada Square
London E14 LB
Bank Sort Code. 185002
BIC / Swift-Code: CITI GB 2L
IBAN-Nr. GB69CITI18500812699958
Account-Name. Interactive Brokers UK Ltd
Account-Nr. 12699958

Should you require information regarding the average cash balance in your account, you may create a Flex Query through Account Management by navigating to Reports > Activity > Flex Queries.

You may similarly run a Flex Query within Account Management in order to obtain ISIN information for non-US assets. IB does not provide customers with ISIN information for US securities; however CUSIPs may be obtained through a Flex Statement query provided the account has subscribed to the CUSIP Service, available for USD 1.00 per month for non-professional accounts. Customers requiring ISIN data for US securities may obtain such information from company websites or internet searches.
 

Please be aware that Interactive Brokers does not provide information to the Spanish government directly relating to Form 720. Customers are responsible for all reporting aspects and should consult with their tax advisor for any assistance in completing the required documentation.
 

Information Regarding the Italian Financial Transaction Tax

Übersicht: 

This document is designed to provide an overview of how the Italian Financial Transaction Tax (I-FTT) will be handled by Interactive Brokers.

Effective March 1, 2013, a new tax has been implemented on the purchase of certain Italian securities.

Effective September 1, 2013, a new tax will be implemented on the purchase and sale of certain Italian derivatives.

 

Tax Rate

The tax rate for the year 2013 will be 0.12% for shares transacted on regulated markets and MTFs and 0.22% for those transacted outside of these markets. The tax rates are to decrease in 2014 to 0.10% and 0.20% respectively.

The acquisition of the underlying stock upon exercise or delivery of a derivative instrument will be subject to the higher (0.22% in 2013) rate.

Scope

The I-FTT will be applied to shares provided the issuer is resident in Italy. In addition, the I-FTT will be applied to securities representing shares issued by companies resident in Italy (example American Depository Receipts).

The acquisition of shares whose average market capitalization in November of the previous year was less than EUR 500 million will not be subject to the tax.

While at this time the Italian Tax Authorities have not defined corporate actions for which the acquisition of shares may be subject to the I-FTT, traders should be aware that as information is released, IB will assess taxes as required.

Calculation Method

The tax will be calculated on the net settlement per ISIN per final beneficiary per day. The net long share quantity will be multiplied by the average price of the purchase shares. Securities with identical settlement dates will be netted together for the determination of the tax.

In the event the net settlement includes transaction executed both on and off regulated markets, a blended tax rate will be used. For example

Location Purchase Quantity Sale Quantity Price Net Quantity
Regulated Market / MTF 10 15 50 (5)
Other 15 5 51 10

The final net position of the above transactions is 5

Weighted average purchase price = (10*50 + 15*51) / 25 = 50.60

Tax Base = 5 * 50.60 = 253

Average Tax Rate = (15*0.22% + 10*0.12%) / 25 = 0.18%

Tax Due = 253 * 0.18% = 0.46 EUR

The tax may be due on either the actual settlement date or the contractual settlement date of the transaction. IB intends to calculate the tax based on the contractual settlement date, which on most European venues is T+3 with the exception of the German markets where it is T+2. Please contact IB should you wish to discuss changing this default.

Worksheet for Form 8949 - TurboTax FAQs

Which IB tax reports may be imported into TurboTax?

The only tax report for which IB supports import to TurboTax is the Worksheet for Form 8949. This IRS form is used by U.S. persons to report the sales of securities. It also serves to reconcile balances reported on Form 1099-B and provides summary computations for Schedule D.

 

How does file import work?

File import begins by logging into Account Management, selecting and downloading the file to your desktop and then importing from within TurboTax application. detailed steps for completing this process may be found within KB2030.

 

Do all versions of TurboTax support this file import feature?

No. While IB produces a file in a TurboTax Tax Exchange Format (.TXF), not all TurboTax applications accommodate this file import feature.  As a general guideline, the CD/download versions support this feature and the online versions do not.  Note, however, that this is only a guideline and the actual functionality may vary depending the specific CD/download software package your are using (e.g., Basic, Deluxe, Premier, Home & Business, Business) and whether you are using a mobile or tablet version.  Please refer to www.turbotax.intuit.com for additional details.

 

Is the .TXF file compatible with both the Windows and Mac operating systems?

Yes, subject to the guidelines and considerations noted above.

 

Is the .TXF file provided for all IB account types?
Yes, subject to the following:

1, The account is question has qualifying transactions required to be reported on the Worksheet for Form 8949; and

2. Those transactions do not include IRS required codes which TurboTax does not support.  If this is the case you will receive an error message when attempting to download the TXF file (i.e., “Your import file contains IRS required information, the import of which is not supported by TurboTax”). Here, TurboTax offers an alternative method which allows one to enter summary numbers from the worksheets into the electronic version of Form 8949, file electronically and mail in a schedules of trades thereafter. Detailed instructions for this method may be found within KB2026.

 

Does IB support the export of the Worksheet for Form 8949 in any other format?

Yes. In addition to the TurboTax .TXF format, IB supports the download of this worksheet in a Comma-Separated Values, or .CSV file format.  Files in this format can be opened in applications such as Microsoft Excel, Open Office Calc or Google Docs. The .CSV file format is not supported for purposes of import to TurboTax

Is there a transaction limit for TXF import?

While there is no transaction limit enforced by IB, TurboTax restricts the import to files containing no more than between 2,000 to 2,500 transactions for system performance purposes.  Note that the precise limit depends upon the volume of data in each transaction, which explains why TurboTax cannot provide an exact number.  In the event the import of a file containing transactions above the threshold is attempted, an error message will appear (e.g., “The selected file contains no importable tax information. Please select a different file”).  IB is not aware of any workaround for this restriction and suggest that you contact TurboTax Support for assistance.

 

Are there any dollar amount limits associated with the TXF file?

Yes. Again, while IB imposes no limits, TurboTax has a 9-digit limit in data entry fields; when exceeding that limit, you'll receive a message similar toThe value is too large for this field”

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