Where Is Box 12 on 1099-B and What Does It Mean?

Box 12 on Form 1099-B is a checkbox labeled “Check if Basis Reported to IRS.” If your broker checked it, the cost basis shown in Box 1e was transmitted to the IRS along with your sale proceeds. If it’s blank, only the proceeds went to the IRS, and your own records have to carry the cost basis. That single checkbox decides how closely the IRS can match your return against what the broker reported, and it feeds into the letter code that tells you where on Form 8949 the transaction belongs.

Where Box 12 Sits on the Form

Box 12 appears in the middle of Form 1099-B, grouped with the fields that describe the cost basis of the transaction. Nearby you’ll see Box 1b (date acquired), Box 1c (date sold), and Box 1e (cost or other basis).¹

When Box 12 is checked, the IRS already has both numbers it needs to compute your gain or loss: proceeds and basis. Reporting different figures, or leaving the transaction off entirely, will trigger a matching notice. When Box 12 is not checked, the IRS has only the proceeds. You still owe tax on any gain; the agency just doesn’t have the basis on file to verify what you report.

The Field People Actually Need: “Applicable Checkbox on Form 8949”

Near the top of Form 1099-B is a separate field labeled “Applicable checkbox on Form 8949.” It holds a single letter, and that letter is usually what someone looking at the form is trying to decode.¹ The letter rolls two facts into one code:

Whether the sale is short-term (held one year or less) or long-term (held more than one year). Long-term gains are taxed at lower rates.²
Whether the cost basis was reported to the IRS — the same question Box 12 answers.

So Box 12 and the letter code are telling you overlapping things. The letter code is the one you’ll actually transfer to your return.

What Each Letter Code Means

Six standard codes cover almost every situation:

Code A: short-term sale, basis reported to the IRS. The default for most stocks bought and sold through a brokerage within a year.
Code B: short-term sale, basis not reported to the IRS. You supply the basis from your own records.
Code C: short-term sale not reported on any 1099-B. You won’t see this on a 1099-B itself; it covers transactions that weren’t reported to you at all.
Code D: long-term sale, basis reported to the IRS.
Code E: long-term sale, basis not reported to the IRS.
Code F: long-term sale not reported on any 1099-B.

There is also a less common Code X. A broker uses Code X when it can’t tell whether the gain or loss is short-term or long-term. If you see it, check your own records for the acquisition date and classify the transaction yourself.³

Why Some Transactions Show No Basis

Codes A and D involve “covered” securities, meaning your broker is legally required to track and report the cost basis. Stocks and mutual fund shares acquired on or after January 1, 2012 are generally covered. Shares bought before that date often aren’t, which is why older holdings tend to appear with Code B or E and a blank Box 12.

For noncovered securities, the basis shown on the 1099-B may be blank or inaccurate. You’re responsible for reconstructing the real purchase price from trade confirmations and statements. Understating basis means overpaying tax; overstating it invites penalties.

Putting the Code onto Form 8949

Form 8949 has two parts: Part I for short-term transactions and Part II for long-term transactions.⁴ Each part has checkboxes at the top matching the letter codes. You use a separate copy of Form 8949 for each code category.

Codes A, B, and C go on Part I. Check the matching letter at the top.
Codes D, E, and F go on Part II. Check the matching letter at the top.

After listing each transaction with its description, dates, proceeds, and basis, you total the columns and carry the totals to Schedule D. Part I totals with box A checked go to Schedule D, Line 1b. Part II totals with box D checked go to Line 8b.⁴ Schedule D then combines everything into your overall capital gain or loss for the year.

When You Can Skip Form 8949 Entirely

Some straightforward Code A and Code D transactions don’t need to be listed on Form 8949 at all. If the code is A or D, no adjustments are needed, and no special codes apply, you can add up all your Code A proceeds and basis and enter the totals directly on Schedule D, Line 1a. Do the same for Code D on Line 8a.⁴

This can save real time if you have dozens of clean stock trades. But as soon as a transaction needs an adjustment, such as a wash sale or a basis correction, that one has to be reported individually on Form 8949.

Fixing a Wrong Basis

Brokers get the cost basis wrong often enough that it’s worth knowing how to correct it, and the right method depends on whether Box 12 was checked.

If the basis was not reported to the IRS (Codes B or E, Box 12 unchecked), the fix is straightforward. Enter the correct basis in column (e) of Form 8949 and leave column (g) at zero. The IRS has nothing on file to compare against.³

If the basis was reported to the IRS (Codes A or D, Box 12 checked), you can’t quietly substitute a different number, because the IRS is already holding the broker’s figure. Enter the broker’s reported basis in column (e) even though it’s wrong, enter code B in column (f), and put the correction in column (g). Subtract the correct basis from the reported basis: a positive adjustment increases your gain (the broker overstated basis), and a negative adjustment reduces it (the broker understated basis).³

Wash Sales

A wash sale happens when you sell a security at a loss and buy a substantially identical one within 30 days before or after. The loss is disallowed and added to the basis of the replacement shares. Your broker may report the disallowed amount in Box 1g. On Form 8949, enter code W in column (f) and the nondeductible wash sale loss as a positive number in column (g). If the broker’s Box 1g figure is wrong, enter the correct disallowed amount instead and attach an explanation.³

One Case Where None of This Applies

If your 1099-B reports regulated futures contracts, foreign currency contracts, or nonequity options, the broker fills in Boxes 8 through 11 and leaves the “Applicable checkbox on Form 8949” field blank.¹ Those are Section 1256 contracts and go on Form 6781, not Form 8949. Box 12 isn’t the field to look at for them.

1
Internal Revenue Service. Instructions for Form 1099-B (2026)
2
Internal Revenue Service. Topic no. 409, Capital Gains and Losses
3
Internal Revenue Service. Instructions for Form 8949
4
Internal Revenue Service. Form 8949 – Sales and Other Dispositions of Capital Assets