What Records Should a Stock Trader Keep for Taxes?

Form 1099-B is the tax form a US broker sends after the end of the year, listing each sale in a taxable account: the security, the dates, the proceeds and, where the broker has it, the cost basis and any wash-sale adjustment. The IRS receives the same figures.

It is the centerpiece of your records. It is also a report from one firm about one account, built from what that firm could see, and several things that affect your tax figures happen outside its view.

What to keep

• Broker statements and the 1099-B, for every taxable account, including corrected forms, which can arrive after the first one.
• Trade confirmations. They show the exact trade date, price, share count and fees for each execution.
• Cost basis records for shares you transferred in. Purchase confirmations or statements from the old broker.
• Your own wash-sale tracking across accounts. More on this below.
• Corporate action notices. Splits, reverse splits, mergers, spin-offs and return-of-capital distributions can all change basis or share count.
• Your trade log. Entry, exit, size and reason for each trade.

The trade log is the one no broker keeps for you. It records why you traded, which the forms never show, and a trader who already keeps a skipped-trades log alongside it has most of the habit in place. It also gives you a second, independent list of trades to reconcile against the 1099-B line by line.

What the 1099-B does not tell you

Basis on some shares. For shares bought long ago, or moved from another firm without their basis records, the form may show the basis as missing or report it only to you and not to the IRS. You still need the figure. The cost basis page explains how it is built.

Wash sales it cannot see. A broker generally tracks wash sales only within the account it holds. If you sell at a loss in one account and buy the same stock within 30 days in another, at a different broker or in a retirement account, the IRS rule can still apply, and none of the forms will flag it for you, which is why a single list of every buy and sell across every account you control is the only reliable way to catch it. The wash sale page covers the rule; the wash-sale window calculator finds the dates.

Your lot choices. If you picked specific tax lots when selling, keep the record of the instruction. See choosing tax lots before you sell.

Anything about your situation. The form reports trades. Whether they are treated differently because of how often you trade, or because of elections you made, is a question for a tax professional.

A worked reconciliation

Say your own log shows 42 closed trades in one account for the year. The main section of the 1099-B, for shares whose basis the broker reports to the IRS, shows 40 sales.

Nothing was missing. Two sales sat on a different page of the form, and they were exactly the ones whose basis depends on your records. Count by shares as well as lines, since a single order filled in parts can appear as several lines.

How long to keep them

The IRS publishes guidance on how long to keep tax records, and the answer depends on your situation. For records that support cost basis, the relevant clock generally starts only when you sell the shares, so basis records for a position you have held for a long time need to be kept for as long as you hold it and then for the period the IRS guidance sets for the year of the sale. Check the current IRS guidance on recordkeeping, or ask a tax professional, before discarding anything.

The checklist

• Download each year’s 1099-B and any corrected versions.
• Save monthly statements.
• Save trade confirmations, or confirm your broker keeps them available.
• File basis records for every transfer in.
• Keep one wash-sale list across all accounts, including retirement accounts.
• Save every corporate action notice.
• Reconcile your trade log with the 1099-B before filing.
• Store copies somewhere other than the broker’s website, so a closed account does not take your history with it.