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, the IRS received your proceeds but not your purchase price. That single mark changes how you fill out Form 8949 and whether the IRS already has a number to match against yours.¹

What the Checkbox Actually Means

Box 12 sits in the middle of Form 1099-B, near Box 1b (date acquired), Box 1c (date sold), and Box 1e (cost or other basis). Its job is narrow: it confirms whether the number in Box 1e was sent to the IRS.

When Box 12 is checked, the IRS has both sides of the transaction. Its matching system can flag a return that reports different figures or omits the sale. When Box 12 is not checked, the IRS knows what you sold and what you received, but not what you paid. You still owe tax on any gain, and you still have to report it. The absence of a check is not a pass.

The Field People Usually Mean When They Ask About Box 12

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 what most taxpayers are actually hunting for when they scan the form. The letter tells you which section of Form 8949 to use, and it combines two facts: holding period (short-term or long-term) and whether the basis was reported to the IRS.¹

Short-term means you held the asset for one year or less. Long-term means more than one year, and long-term gains are taxed at lower rates.²

The standard codes:

Code A: short-term, basis reported to the IRS.
Code B: short-term, basis not reported to the IRS.
Code C: short-term, not reported on any 1099-B (you wouldn’t see this printed on a 1099-B).
Code D: long-term, basis reported to the IRS.
Code E: long-term, basis not reported to the IRS.
Code F: long-term, not reported on any 1099-B.

There’s also Code X, which your broker uses when it can’t tell whether the holding period is short-term or long-term. If you see X, pull your own records and classify the trade yourself.³

Covered vs. Noncovered Shares

Codes A and D apply to “covered” securities, meaning ones your broker is required to track basis for. Stocks and mutual fund shares acquired on or after January 1, 2012 are generally covered. Shares you bought before that date may be noncovered, which is why they turn up as Code B or E even though your broker knows you sold them.

When a security is noncovered, the basis printed on your 1099-B may be blank or wrong. You’re the one responsible for the accurate number, using trade confirmations or account statements. Understate your basis and you overpay tax; overstate it and you can face penalties.

Where Each Code Goes on Form 8949

Form 8949 has two parts: Part I for short-term, Part II for long-term. Each part has multiple checkboxes at the top, and the letter from your 1099-B tells you which one to mark. Use a separate copy of Form 8949 for each checkbox category.⁴

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. Same idea.

After you list transactions with descriptions, dates, proceeds, and basis, the column totals flow 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 Schedule D, Line 8b. Schedule D then combines everything into your overall capital gain or loss.⁴

When You Can Skip Form 8949

You can bypass Form 8949 for a transaction if all three are true: the code is A or D (basis reported to the IRS), no adjustments are needed, and no special codes apply. Add up the proceeds and basis for your Code A trades and enter the totals directly on Schedule D, Line 1a. Do the same for Code D on Line 8a.⁴

The moment a trade needs any adjustment (a wash sale, a basis correction, anything), that trade goes through Form 8949 individually.

Fixing a Wrong Basis

Brokers make mistakes. How you correct one depends entirely on Box 12.

If Box 12 is not checked (Codes B or E), just enter the correct basis in column (e) of Form 8949 and leave column (g) at zero. The IRS has nothing on file to compare, so the right number is the whole answer.³

If Box 12 is checked (Codes A or D), you can’t just overwrite the broker’s number, because the IRS already has it. Enter the broker’s reported basis in column (e), put code B in column (f), and calculate the adjustment for column (g) by subtracting the correct basis from the reported basis. If the broker overstated your basis, the adjustment is positive (increasing your gain). If the broker understated it, the adjustment is negative.³

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

Two Things Box 12 Doesn’t Cover

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. These are Section 1256 contracts, and they go on Form 6781, not Form 8949. Section 1256 contracts are taxed 60% long-term and 40% short-term regardless of holding period, and open positions are marked to market at year-end. Totals from Form 6781 flow directly to Schedule D.¹⁵

Digital assets are their own track too. For tax year 2025 and beyond, brokers use Form 1099-DA, and Form 8949 added six checkboxes for digital assets: G, H, and I on Part I (short-term) and J, K, and L on Part II (long-term). The letter logic mirrors the traditional codes, so G is the digital-asset version of A, H mirrors B, and so on. If you sold cryptocurrency, use those boxes rather than C or F.⁶³

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
5
Internal Revenue Service. Form 6781, Gains and Losses From Section 1256 Contracts and Straddles
6
Internal Revenue Service. About Form 1099-DA, Digital Asset Proceeds From Broker Transactions