U.S. · Tax forms
1099-B box 2 short term or long term.
How the broker decides, how the IRS counts the days, and what to do when box 2 is blank.
Box 2 tells you whether the sale is short term, long term, or possibly ordinary. Long term means held more than one year. For Form 8949 you start counting the day after you got the property and include the day you sold it. Inherited property is treated as long term. If box 2 is blank and the form shows code X, the broker does not know, so use your own records.
Check a holding period
Result
What the broker must consider for box 2
| Item | What the IRS instructions say | What you see |
|---|---|---|
| Short term or long term | Determine whether the gain or loss is short term or long term under section 1222. | One of the boxes is checked. A single 1099-B cannot report both. |
| Ordinary checkbox | Check "Ordinary" if all or part of the gain or loss may be ordinary. | Possible ordinary treatment; look to the form's notes or a preparer. |
| Foreign currency | For transactions in a currency other than the U.S. dollar, brokers must check "Ordinary" because they may be section 988 transactions, and also check short or long term. | Both Ordinary and a term box appear. |
| Transfer statement and Form 8937 | The broker considers information on a transfer statement and Form 8937. | Holding period may carry over from another firm. |
| Inherited or gifted stock | The broker applies the rules for stock acquired from a decedent or as a gift. | Inherited stock is generally long term. |
| Short sales | Short or long term depends on the acquisition date of the security delivered to close the short sale. | Not the date you opened the short. |
| Wash sale replacement | For loss sales reported on a 2013 or earlier Form 1099-B (and some 2014 and 2015 forms), the broker uses section 1223(3) to set the replacement holding period. | Applies to wash sales reported on older forms. |
| Outside the account | The broker need not consider elections or events outside the account, such as constructive sales or straddles. | You may need to adjust for those yourself. |
How to count the days
The Form 8949 instructions say that the holding period for long-term gains and losses is generally more than one year, and that to figure it you begin counting on the day after you received the property and include the day you disposed of it. Under that rule a share bought on January 1, 2025 becomes long term only if sold on January 2, 2026 or later. Selling on January 1, 2026 is exactly one year and still short term. The checker above uses that rule and declines to answer for February 29 purchases, where the anniversary is ambiguous.
Inherited property
The Form 8949 instructions say that if you disposed of property you acquired by inheritance, you generally report the disposition as long term regardless of how long you held it, using Part II and writing INHERITED in column (b).
When box 2 is blank
If box 2 on Form 1099-B is blank and code X is in the "Applicable checkbox on Form 8949" box, the broker does not know whether the gain or loss is short term or long term. The Form 8949 instructions tell you to use your own records. Brokers use code X when they cannot decide between box B and box E because the holding period is unknown.
Why it matters
Short-term and long-term results go on separate parts of Form 8949 and separate lines of Schedule D. You may not mix them on one row, even for a block of stock bought on several dates; the Form 8949 instructions allow "VARIOUS" in column (b) but still require reporting the short-term part in Part I and the long-term part in Part II.
Where next
The Form 8949 box also depends on basis reporting, covered in box 5 and box 12. To estimate tax on the result use the capital gains tax calculator.
Sources
- Instructions for Form 1099-B: Box 2, Type of Gain or Loss.. Read November 2, 2026. (IRS page last reviewed April 30, 2026.)
- Instructions for Form 8949 (2025): Short-Term or Long-Term, Form 1099-B, Column (b) Date Acquired and Inherited property.. Read November 2, 2026. (IRS page last reviewed April 30, 2026.)
Line and box numbers are those printed in the IRS instructions named above and can change from year to year; match each box by its label.
Frequently asked questions
What is box 2 on a 1099-B?
Box 2 shows whether the gain or loss is short term or long term, with an Ordinary checkbox if part of it may be ordinary.
How long must I hold an investment for long-term treatment?
More than one year. Counting begins the day after you acquired it and includes the day you sold it.
Is inherited stock short term or long term?
The Form 8949 instructions say gains and losses on inherited property are generally reported as long term regardless of how long you held it.
Why is box 2 blank on my 1099-B?
The broker may have checked box 5 (noncovered security), or may not know the holding period. If code X appears, use your own records to decide.
What does the Ordinary checkbox mean?
It means all or part of the gain or loss may be ordinary rather than capital. Brokers must check it for transactions in a foreign currency, for example.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. The payer, a CPA or an enrolled agent can confirm what a box or code means for your return. Everything runs in your browser; nothing you enter is sent anywhere.