Form 1099-B: Get Covered with the Basics of Non-Covered Basis

Non-covered cost basis is the cost basis for securities purchased prior to January 1, 2011. What does this mean for you? Learn more at TD Ameritrade.

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You’ve received your 1099-B and are all set to start filing your taxes. But then you review your form. You notice non-covered cost basis, and some of it is missing. Now what? We’ve got you covered with some information on the essentials of non-covered securities. 

The Basics: Covered vs. Non-Covered

Non-covered cost basis is the cost basis for securities purchased prior to January 1, 2011. At that time, a new cost basis requirement was enacted that requires brokers to report cost basis information on Form 1099-B and to the IRS after the sale of certain securities. The rule is now fully in effect, but was initially rolled out in phases: 

  • January 1, 2011: Equities
  • January 1, 2012: Mutual funds and equities purchased through dividend reinvestment plans
  • January 1, 2014: Fixed-rate debt instruments and options
  • January 1, 2016: Variable-rate debt instruments and other complex securities

If you sell securities purchased prior to the dates listed above, your 1099-B may not include cost basis information, or it may be incomplete. This doesn’t mean the non-covered cost basis isn't reportable; rather, it's not required to be reported by a broker to the IRS. You're still responsible for including this information on Schedule D of your tax return.

Calculating Cost Basis

Gone are the days when you tracked your cost basis on a general ledger notebook with a pencil (and a very large eraser). TD Ameritrade offers a more efficient and easier way to determine cost basis with the Gain/Loss page powered by GainsKeeper®.

All covered securities are automatically tracked in GainsKeeper and the cost basis is automatically adjusted for wash sales, corporate actions, dividend reinvestments, return of capital, gift adjustments, inheritances, and any other adjustments.

Non-covered securities are also tracked, but depending on the year of purchase, the original purchase information may not be available in GainsKeeper.

All of your current cost basis information, covered and non-covered, in GainsKeeper flows to Form 1099-B for taxable accounts. The non-covered cost basis will display in the non-covered section of the form, but won’t be reported to the IRS. Having the cost basis for covered and non-covered securities in one place may help you streamline the tax filing process.

Looking Beyond 2017

Even if you've already reported your taxes for securities you sold in 2017, you may own other non-covered securities for which you'll need to report the cost basis in the future. To help avoid any issues down the road or missing information, you can check your covered and non-covered cost basis on the Gain/Loss page in GainsKeeper. Simply click the "Edit your GainsKeeper cost basis" button if you need to update the information for a non-covered security. If there is missing basis you are unsure of, or the basis doesn't seem accurate, you can call the number below for assistance.

Call Us
800-454-9272

Tax lot and performance reporting is offered and conducted by Wolters Kluwer Financial Services ("WKFS") for all securities in an account and is made available by TD Ameritrade for general reference and education purposes. However, for those securities defined as "covered" under current IRS cost basis tax reporting regulations, TD Ameritrade is responsible for maintaining accurate basis and tax lot information for tax reporting purposes. TD Ameritrade employs WKFS's GainsKeeper® system in doing so, and the information that GainsKeeper provides is included with the aforementioned tax lot and performance reporting maintained by the GainsKeeper system. TD Ameritrade is not responsible for the reliability or suitability of the information for those securities that are not "covered." TD Ameritrade does not provide tax advice. You may wish to consult independent sources with respect to tax lot and performance reporting. Please consult with a tax-planning professional with regard to your personal circumstances. TD Ameritrade and Wolters Kluwer Financial Services, Inc. are separate, unaffiliated companies and are not responsible for each other's policies and services. GainsKeeper is a registered trademark of Wolters Kluwer.

TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.

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