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Where do I report tax Free Income from 1099-B

Tucsonpremium
Level 2

I need to report tax exempt income not interest from a 1099-B, can't find where to go

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6 Comments 6
sjrcpa
Level 15

 What kind of income is it? Usually tax exempt income is not shown on a 1099-B.

The more I know, the more I don't know.
IRonMaN
Level 15

As a side note, selling an asset that generates tax exempt income still creates taxable income if it is sold for a gain.


Slava Ukraini!
Tucsonpremium
Level 2

This was reported on 1099-B, it shows sale of shares for $114,251 gain but she never received any money, the funds change from one company to another one

Tucsonpremium
Level 2

Maybe is not tax exempt income, I assume it was by the name First Inv Tax Exempt Income Fund-A

itonewbie
Level 15

@Tucsonpremium wrote:

This was reported on 1099-B, it shows sale of shares for $114,251 gain but she never received any money, the funds change from one company to another one


Are you saying the money never got into her account?  If so, did she work with the broker to find out what happened?  If this is the case, I am sure the SEC would want to know about it.

If the money was deposited into her account, which is what should happen, she has constructive receipt of the money and that's taxable income to her.  Whether she moved the funds to another company is irrelevant.

@Tucsonpremium wrote:

Maybe is not tax exempt income, I assume it was by the name First Inv Tax Exempt Income Fund-A

Maybe?  It definitely is not.  Tax reporting goes by tax law, regulations, and various other guidelines, not by what something is called or assumptions.

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Still an AllStar
George4Tacks
Level 15

@Tucsonpremium wrote:

This was reported on 1099-B, it shows sale of shares for $114,251 gain but she never received any money, the funds change from one company to another one


You then mentioned "First Inv Tax Exempt Income Fund-A". My take on this is that the shares of "First Inv Tax Exempt Income Fund-A" were sold. The money that was never received was used to buy some other fund. The income, i.e. dividend from this may be tax free but the gain (or loss) is not. Hopefully this was a covered sale and the basis is shown. If not, have the client work with the financial advisor to determine what the basis is. A quick search of the price history for this fund shows it right around $9 -$11 for all time, so the gain (or loss) should not be a huge number.  

Welcome to the world of professional tax preparation. 


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