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Why no 1099 for short term capital gains from stocks?

Personal Finance & Money Asked by DavChana on August 3, 2021

I bought Google, Tesla, & some other fsmous stocks for total $370 in various times in 2019, & sold all of them for total $440 in February 2020. This makes $70 profit as short term gain.

I am using M1Finance as my tax broker, & Turbo Tax FreeFile edition for 2020 tax return.

M1 gave a 1099 Composite, with all 1099 forms as 0.00 value. Line 1a is 0.00 Line 2 is 0.00 All the way all listed lines or boxes in 1099 are 0.00.

Next page Transactions Summary correctly says Cost Base $370, Sold at $440, Net Gain $70.

Is their 1099 wrong because of 0.00? Should not it list $70 somewhere as profit to me? If the 1099 is correct, then should I just report $70 as income, because its going to get taxed as normal income?

A partially relevant answer [1] says ignore all 0.00 1099 form if no transactions occurred. In my scenario, transactions occurred.

Edit: Screenshot with personal info redacted:

Composite 1099:

Summary Page:

01: Answer!

3 Answers

The instructions on page 2 tell you that it's your job to correctly report your capital gains in your tax returns: "Please ... determine correct amounts to include in your return."

The Tax Withheld is zero because you didn't ask the brokerage to withhold any tax for you. That's normal.

Answered by Orange Coast- reinstate Monica on August 3, 2021

Should not it list $70 somewhere as profit to me? If the 1099 is correct, then should I just report $70 as income, because its going to get taxed as normal income?

Your $440 sales prices, $370 purchase prices and $70 profit are listed on the Summary page in the Total Short-term section.

Answered by RonJohn on August 3, 2021

If you check the overview page, there are four blocks, for 1099-INT, 1099-DIV, 1099-MISC, and 1099-B. Three of them have all form-'boxes' listed as 0 (zero), but 1099-MISC (bottom left) has only boxes 2, 3, 4 and 8 listed as 0 (zero). The boxes 1, 5, 6, 7, etc. are not listed in that overview, as those are listed on the next page, separately for short term and long term trades - and those are the boxes that have non-zero data.
Basically, they did not show a sum for box 1, etc., but instead a list - and they don't mention that the list comprises the content for box 1, etc.
Certainly not the most clear 1099-* form I have ever seen; they make life unnecessarily hard.

For your taxes, you have to identify which of the numbers on page 2 map to which box of the 1099-MISC (by column headers), and enter them accordingly.

You marked up the area with the 'Federal Taxes withheld' (very end right) - it is normal that they are all zero. Brokerages typically don't pay your taxes; you have to do it. Those zeros are not saying you don't owe taxes, they are saying none have been already paid.

Answered by Aganju on August 3, 2021

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