U.S. · Tax forms
1099-B box 5 noncovered security.
Also settles the mix-up between box 3 and box 12, the "basis reported to the IRS" box.
Box 5 means the broker is not required to report your basis because the security is noncovered. Box 12 is the "basis reported to IRS" checkbox. Box 3 is not about basis at all: it flags collectibles or a QOF. Basis reported (box 12 checked) sends a sale to Form 8949 box A or D; basis not reported sends it to box B or E.
Which Form 8949 box?
Result
The 1099-B checkboxes people confuse
| Box | What the IRS says | Where it points on your return |
|---|---|---|
| Box 3 | Check "Collectibles" if the proceeds are from collectibles; check "QOF" for a disposition of a qualified opportunity fund interest. | Not a basis flag. It only marks the proceeds as collectibles or a QOF disposition. |
| Box 5 | Check if a noncovered security. If checked, boxes 1b, 1e, 1f, 1g and 2 need not be completed and box 12 need not be checked. | Basis may be missing. Enter your correct basis in column (e). |
| Box 6 | Reported to IRS: the first box means gross proceeds, the second means gross proceeds reduced by option premiums. | Tells you which proceeds figure box 1d represents. |
| Box 7 | Loss not allowed based on the amount in box 1d, used for an acquisition of control or substantial change in capital structure. | A special-case loss rule; the broker explains it on the form. |
| Box 12 | Check if basis is reported to the IRS: when box 5 is not checked, or when it is checked but basis is reported in box 1e anyway. | Basis reported. Short term goes to Form 8949 box A, long term to box D. |
| Applicable checkbox on Form 8949 | A one-letter code for how you report it: A and D when basis is reported, B and E when it is not, X when the holding period is unknown. | Use it to choose the Form 8949 box. |
Box 3 is not "basis reported"
Searches for "1099-B box 3 basis reported to the IRS" usually mean box 12. In the current 1099-B instructions box 3 is "Check if Proceeds Are From Collectibles or From a QOF," and the basis flag is box 12, "Check if Basis Reported to IRS." The Form 8949 instructions confirm it: they tell you to look at box 12 on Form 1099-B when deciding between box A and box B, and between D and E. Older forms numbered their boxes differently, so match by the label, not the number, if you have a form from another year.
How the Form 8949 boxes line up
Short-term transactions with basis shown and reported to the IRS go on Form 8949 Part I box A. Short-term transactions with no basis, or basis not reported, go on box B. Long-term equivalents are boxes D and E. If the form shows a basis but box 12 is not checked, the Form 8949 instructions send you to box B or E. The instructions also let you skip Form 8949 for transactions that need no adjustment and report summary totals on Schedule D instead.
If the holding period is unknown
The Form 1099-B instructions use code X when the broker cannot tell whether box B or box E applies because the holding period is unknown. The Form 8949 instructions then say to use your own records. Box 2 on the 1099-B can be blank in that case.
Where next
The date side of the decision is covered under box 2, short term or long term. The basis figure itself is explained under box 1e.
Sources
- Instructions for Form 1099-B: Boxes 3, 5, 6, 7 and 12, and the Applicable Checkbox on Form 8949 codes A, B, D, E and X.. Read November 2, 2026. (IRS page last reviewed April 30, 2026.)
- Instructions for Form 8949 (2025): Part I and Part II box A to F instructions, and the noncovered securities paragraph under column (e).. 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 does box 5 noncovered security mean on a 1099-B?
It means the broker is not required to report your cost basis for that sale. When box 5 is checked, the broker need not complete boxes 1b, 1e, 1f, 1g and 2.
What is 1099-B box 3?
Box 3 is the collectibles or QOF checkbox. It is not the "basis reported to the IRS" box; that is box 12.
What is 1099-B box 12?
Box 12 is checked when basis is reported to the IRS. That usually puts the sale on Form 8949 box A (short term) or box D (long term).
Do I have to figure my own basis for a noncovered security?
Yes. If no basis is shown or the basis shown was not reported to the IRS, you enter the correct basis in column (e) of Form 8949 yourself.
Can I skip Form 8949 for a sale with basis reported?
Sometimes. If you need no adjustment to the basis, gain or loss, the Form 8949 instructions let you report summary information on Schedule D for those box A or D transactions.
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.