Tax Information and Reporting

FAQs


For Brokerage Accounts

Interactive Brokers (IB) reports all reportable amounts on a consolidated form 1099 which includes specific Forms 1099 for each type of income. When issued (on or before February 15 of each year) you may find your forms under Account Management > Reports > Tax > Tax Form. Often tax forms are revised after being issued. We recommend that you check your account periodically for updated forms as you prepare and finalize your tax return.

Additionally, IB issues Form 2439, "Notice to Shareholders of Undistributed Long-term Capital Gains", to holders of regulated investment companies (RICs) or real estate investment trusts (REITs), when applicable. The issuance date of this form varies for each specific investment.


For IRA (Individual Retirement Account), Roth IRA and SEP IRA Accounts

  • Form 1099-R reports distributions from IRAs and SEP IRA and is issued on or before January 31 each calendar year.
  • Form 5498 reports contributions and rollovers to Traditional IRAs, Roth IRAs, and SEP IRAs as well as the fair market value of the account at December 31 of the prior year. Form 5498s are distributed on or before May 31 of each calendar year.

Equity Trust Company serves the trustee/custodian for tax-advantaged accounts. (i.e IRA, Roth IRA, SEP IRA, 401K and Coverdell Education Saving Accounts etc)

All forms and publications cited are Internal Revenue Service Publications available at www.IRS.gov.

To access and print your 1099 forms, log in to Account Management with your IB username and password, select the Reports in the menu, then go to Tax and hit Tax Forms.

You can access forms and reports and the dates they are available here: Reports and Dates

IB recommends that you print your year-end statement, dividend report, and all applicable tax forms.

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

Determine from which account you are missing your consolidated form 1099. If you are missing a consolidated form 1099, please verify that you received interest (including interest on free cash), dividend or payment in lieu, or you sold shares of stock, you bought or sold futures contracts.

Once you have reviewed your account activity from the previous tax year, and, you have determined that you should have received a 1099 for an account, please contact our customer service department with specific details of transactions, including the name of the security, number of shares/contracts, and the trade date. We will research the issue and will advise you once we have concluded our investigation.

A consolidated 1099 is a grouping together into one statement of all the 1099 tax information for your account provided by Interactive Brokers to be used in preparation of your annual tax return. This information is also provided to the IRS. Click on a form below for further details:

1099-INT Reports interest, including US Treasury interest and tax exempt interest (muni interest).
1099-OID Reports accrued interest (original issue discount interest) on bonds where the bond price is discounted to reflect interest or interest rate changes.
1099-DIV Reports dividends, long-term capital gain distributions, return of capital and foreign tax withheld. Also, reports distributions of interests and tax exempt interest from mutual funds.
1099-MISC Reports payments in lieu of interest and dividends received, and stock loan payment received.
1099-B Reports net proceeds from sales of securities. For stocks purchased after 1/1/10 includes cost basis of security. IB reports these in summary form on the consolidated 1099. Reporting is summarized into these sections.
  • Covered securities-short term
  • Covered securities-long term
  • Uncovered securities
1099-R Other 1099s: Distributions from IRAs, Roth IRAs and SEP IRAs.

Please click on the form for further details:


U.S. Forms

1099-INT Reports interest, including US Treasury interest and tax exempt interest (muni interest).
1099-OID Reports accrued interest (original issue discount interest) on bonds where the bond price is discounted to reflect interest or interest rate changes.
1099-DIV Reports dividends, long-term capital gain distributions, return of capital and foreign tax withheld. Also, reports distributions of interests and tax exempt interest from mutual funds.
1099-MISC Reports payments in lieu of interest and dividends received, and stock loan payment received.
1099-B Reports net proceeds from sales of securities. For stocks purchased after 1/1/10 includes cost basis of security. IB reports these in summary form on the consolidated 1099. Reporting is summarized into these sections.
  • Covered securities-short term
  • Covered securities-long term
  • Uncovered securities
1099-R Other 1099s: Distributions from IRAs, Roth IRAs and SEP IRAs.
Dividend Report Detailed information on dividends received, return of capital, payments in lieu paid and received, and foreign tax paid.
Form 8949 Worksheet Calculation of gain and loss on securities and options transactions, for both covered and uncovered securities (with cost basis). U.S persons only.
Form 5498 IRA contribution and Fair Market Value Information.
Form 2439 Reports undistributed Capital gains retained in Registered Investment Companies (RICs) (mutual Funds) and REITs for which the tax has been paid on your behalf.
Form 1042-S Form 1042-S is issued to non-U.S. person who owns an account that received income from United States sources.

Canadian Forms

Form NR4 Reports Canadian tax withheld from Canadian dividends paid to your account. If you are an U.S person, these payments and tax withheld are also included in your 1099.
Form T5008 Form T5008, Statement of Securities Transactions, reports the proceeds of all dispositions or settlements during the year. A separate T5008 will be provided for each transaction involving stocks, options or futures. You may review this information also available on your Annual or Monthly Statement.
Form T5 Form T5, Statement of Investment Income, reports investment income (dividends or interest) paid to your account during the year. Québec residents also receive a Relevé 3, described below.
Form T3 Statement of Trust Income Allocations and Designations, reports distributions of trust unit income, capital gains or return of capital (ROC) from Canadian Unit Trusts during the year.

Québec Forms

Relevé 18 Form RL-18, Securities Transactions, is equivalent to the T5008 and reports the same information to the Québec Ministry of Revenue.
Relevé 3 Form RL-3, Investment Income, is equivalent to Form T5 described above and reports the same information to the Quebec Ministry of Revenue.
Relevé 15 Amounts allocated to the Members of a Partnership, reports income, losses and other amounts allocated from a partnership. A separate RL-15 must be filed for each partner and contain all information requested.
Relevé 16 Form RL-16, Trust Income, is equivalent to the T3 described above and reports distributions of unit trust income, capital gains and eligible dividends to the Québec Ministry of Revenue.

A Payment in Lieu, (PIL), typically refers to a cash debit or credit made to an account in recognition of a stock dividend.


Received

If you buy a dividend-paying stock on margin and Interactive Brokers (IB) lends out the stock, you do not receive dividends, you receive payment in lieu of dividends. PIL in the form of a credit is received by IB for a customer in lieu of dividends or tax exempt interest as a result of a loan of a customer’s securities. These payments are treated as ordinary income and are not generally eligible for the qualified dividend rate. IB reports substitute payments in lieu of dividends in gross on line 8 of Form 1099-MISC.


Paid

A PIL in the form of a debit will be made when an account is holding a short position in a stock on its ex-dividend date. If you borrow stock to make a short sale, you might have to remit payments to the stock lender in lieu of the dividends distributed while you maintain your short position. You can deduct these payments only if you hold the short sale open at least 46 days and you itemize your deductions, and have offsetting investment income. See Publication 550 and Form 1099-Div for more information. When the short position is held less than 46 days the PIL paid is capitalized.

"Covered security" describes investments for which financial institutions are required to report Cost Basis. Cost Basis Reporting Regulations took effect over a four-year phase-in period that began in 2011. During this period, different types of securities became "covered" and subject to new cost basis reporting.

A "covered” security refers to a security you have purchased on or after the effective date, such as equities including foreign securities and ADRs purchased on or after January 1, 2011; mutual funds on or after January 1, 2012; or fixed income, options and structured notes on or after January 1, 2014, are considered "covered”. Not all securities are covered by these regulations. For example, Public Traded Partnerships (PTP) are not subject to cost basis reporting.

As required in the Regulations, when you sell covered securities we will report to the IRS not only the gross proceeds from the sale, but also the cost basis, the date of acquisition and whether any gain or loss with respect to such securities is long-term or short-term.

Maintaining cost basis on non-covered securities is clients' responsibility for tax compliance and filing. Interactive Brokers Group does NOT report cost basis information to the IRS on non-covered security sales.

Equities purchased prior to January 1, 2011, mutual funds purchased prior to January 1, 2012, and other securities-i.e., fixed income, options and structured notes-purchased prior to January 1, 2014 are considered non-covered. Certain securities such as public traded partnerships remain uncovered.

The cost basis of uncovered securities will not be reported to the IRS but is provided to you on your form 8949 worksheet for informational purposes only. The cost basis provided on the worksheet should be verified for accuracy before using the information for your tax return. For sales of non-covered securities, your tax return should include all gross proceeds amounts IB reports on Form 1099-B, as the IRS will compare your tax return to what is reported. The cost basis provided on Form 1099-B for non-covered securities may require adjustment and should be validated against your own tax records.

Debt instruments and Options are reportable as of January 1, 2014 include options on stock and interests in stock, options on futures, and options on most debt instruments.

For more details of Cost Basis, please consult your tax advisor or see the IRS Publication 550.

The gross proceeds are reported net of commissions.

2014: Equity options, single stock futures are reportable in our Consolidated 1099. Beginning with transactions executed after 1/1/2014 these items will also include cost basis.

In general, gain and loss recognition does not occur until the investment sold, however, the gains and losses from Section 1256 contracts are "marked-to-market", which any contract held at the end of the tax year is assumed to have been sold for its current fair market value, the resulting unrealized gain or loss is recognized. When the contract is actually sold, any difference between the actual gain or loss realized on the sale and any amounts of unrealized gain or loss that have previously been recognized is captured in the year of sale.

Section 1256 contract is a regulated futures contract, foreign currency contract, non-equity option, or dealer securities contract, all of which are usually reported to taxpayers in Box 10, 11 and 12 on Form 1099-B.

Since these contracts are considered to be sold every year, the holding period of the underlying asset does not determine whether or not the gain or loss is short term or long term, rather all gains and losses on these contracts are considered to be 60% long term and 40% short term capital gain.

U.S.

U.S security transactions are reported on a trade date basis. A sale is reportable in the year it is executed not settled. In the case of security sales which take place in December but which do not settle until the following year, the sale proceeds will be reported in the year of the trade, and accrued dividend or interest, if any, will be reported the following year's 1099-DIV/INT.


Canada

The Canada Revenue Agency generally considers the settlement date basis. The settlement date for most Canadian and U.S. stock exchanges generally takes place three business days after the trade date.

A sale is reportable in the year it is settled not traded. For example, the sale proceeds should be current year if a trade is settled on December 31. If the trade takes place on XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

For U.S. exchanges, the last trading date for settlement in 2014 would generally be December 31.

IB sends an electronic file to the IRS with the same information that was reported to you on Forms 1099.


Note:

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.