How do I adjust cost basis for stock sale?
I had a bunch of stock in 1 ETF held in a personal brokerage account that I bought at various times and various prices. I sold a large volume of it in 2025 all for 1 price. My brokerage (interactive brokers) allows me to select which lots will be used to compute the cost basis when I made the sale, but it seems that they have lost my selections and used a different allocation for "which lots" I ultimately sold, which greatly lowered my cost basis for the sale.
I have tried to contact them but haven't been able to get an updated 1099-B reflecting the correct cost basis. How do I go about correcting the cost basis on my own?
Answers
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Hello pokebowl,
If your broker won't correct your Form 1099-B, you can still enter the correct cost basis in the software. You'll enter the 1099-B exactly as you received it, entering the cost basis from the 1099-B into the Cost Basis Box.
On the next screen when it asks if you have Adjustments to the Stock Sales, select Yes. The software will then provide a list of adjustments to choose from, the first line will say, "The basis shown in Box 1e is incorrect." By marking this line, the software will provide a box for you to enter the correct basis amount. Generally, your cost or other basis for investment sales should include the price you actually paid for the stocks and any cost of purchase, such as commissions.
To get there in the software: Income > Common Income > Your Investment and Savings Accounts (1099-INT/DIV/B/DA).
Keep detailed records of your original lot selections and calculations showing which shares you sold and their actual purchase dates and prices. You'll want to retain this documentation in case of an audit, as the IRS will receive the original 1099-B information from your broker so you may need to provide your documents as well.0 -
does free tax support form 8949?
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Hi Taylor! Thank you for your reply. The specific issue at hand for me is that the broker's mismatch of tax lots has caused some profits to be classified as long term instead of short term gains, so in addition to having to correct the cost basis, I also have to amend the proceeds from my long term gains, and add new entries corresponding to short term gains. What would be the right way to go about this?
To give an illustrative example of the situation, let's say I
- Bought 200 shares of company A in October 2024 for 100$ each
- Bought 100 shares of company A in October 2025 for 200$ each
- Sold 150 shares of company A November 2025 for 210$ each
My 1099-B currently shows that my cost basis for the 150 shares I sold is 20,000$, meaning that I realized 11,000$ in LT gains. When I sold the shares, I specifically told my broker that I want to allot the 150 share sale to 100 of my October 2025 shares and 50 of my October 2024 shares, which would yield 1,000$ in ST gains and 5,500$ in LT gains.
In order to correct this, I would have to update my LT gains basis, but also update my LT sale proceeds, as well as add a new entry for a previously-unaccounted-for ST sale with proceeds and basis. Hope this makes sense and thanks again for your guidance.
Best,
Ahmed
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Hi choco,
Yes, our software supports the Form 8949. See the Investments and Savings section of the software to enter your stock sales from a 1099-B or consolidated statement. This article may help you.
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Hi Pokebowl,
Generally speaking a broker should be sending you a 1099-B that will handle the situation you gave an example of. If you need to make manual adjustments to your ST and LT sales, basis and proceeds, you will need to do that manually. Keep good records of the adjustments.
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