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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!

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  • There are multiple sub-parts on the 1099 - make sure you watch for 1099-DIV, 1099-B, (1099-INT) - are they all separately zero? In other words, the first entry is not the total...
    – Aganju
    Commented Feb 9, 2021 at 1:37
  • @Aganju Thanks, I have added screenshots, yes, DIV INT MISC B all show zeroes, but summary page shows profit.
    – DavChana
    Commented Feb 9, 2021 at 2:14
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    FYI: OMB numbers are not personal, and are the same for everybody including me: 1099-DIV is 1545-0110, -INT is 1545-0112, -MISC is 1545-0115, and -B is 1545-0715. Commented Feb 10, 2021 at 5:54

3 Answers 3

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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.

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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.

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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.

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