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When you sell shares, keep the broker’s Form 1099-B (or substitute statement), the records that prove what you paid and how your basis changed, the sale details, and copies of the return and schedules you filed. A broker statement may not contain basis for older or noncovered securities, so your own acquisition records can be essential. For federal tax purposes, retain share-basis records through the limitations period for the year of the taxable sale—not merely for a set number of years after purchase.
The documents to keep after selling shares
Organize the records below for each account and sale. Together they let you or your tax preparer verify proceeds, identify the shares sold, calculate adjusted basis, and support the gain or loss reported on the return.
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Broker Form 1099-B or substitute statement
Keep the broker’s Form 1099-B and any substitute statement. It generally reports the sale proceeds and, for covered securities, may also show the acquisition date, whether the transaction is short- or long-term, adjusted basis, and specified adjustments. Treat it as a starting point rather than proof that every basis fact is complete. Reporting requirements can leave basis-related boxes blank for noncovered securities.
Purchase confirmations and account statements
Preserve trade confirmations and account statements showing the purchase date, number of shares, purchase price, and commissions or other purchase costs. Basis generally includes those purchase costs. These records are particularly important when a broker’s historical data is incomplete or when shares were transferred between accounts.
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Records of basis adjustments
Keep documents showing every event that could increase or decrease basis. For shares, relevant examples include reinvested dividends, nondividend distributions, stock splits, and other corporate actions. Retain issuer notices, broker adjustment statements, dividend records, and transaction histories that explain the change rather than relying only on a final number in an account display.
Sale confirmation and fee details
Retain the trade confirmation for the sale and records of applicable sale costs. These documents let you reconcile the proceeds and adjustments on the broker statement with the amounts entered on Form 8949 and the tax return.
Filed return and schedules
Keep a complete copy of the filed federal return, including Form 8949 and Schedule D when they apply, plus any attachments and e-file acceptance confirmation. The Internal Revenue Service says copies of filed returns help with future returns and with calculations for an amended return.
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If you had to reconstruct basis, save every item used: archived broker statements, issuer information, transfer records, account-opening documents, dividend records, and your written calculation. Keep the evidence with the return for the sale year so another person can follow how the figure was determined.
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What your basis records must establish
For each lot sold, your records should allow the calculation of adjusted basis and identification of the exact shares disposed of. At a minimum, establish:
- the acquisition date;
- the quantity of shares acquired and sold;
- the original purchase price;
- commissions or other purchase costs included in basis;
- increases to basis, such as reinvested dividends or qualifying corporate actions; and
- decreases to basis, such as nondividend distributions or other applicable adjustments.
The IRS states in the Form 8949 instructions: “You must keep accurate records that show the basis and, if applicable, adjusted basis of your property.” If shares were purchased at different times and prices, identify which lots were sold and retain the evidence supporting that identification. A single account total is not enough when the sale involves multiple lots.
Covered versus noncovered securities
The broker-reporting distinction affects how much independent documentation you need.
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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →| Security status | What the broker may report | What you should still retain |
|---|---|---|
| Covered security | Acquisition date, short- or long-term status, adjusted basis, proceeds, and certain adjustments may be reported on Form 1099-B. | Purchase confirmations, statements, adjustment records, sale confirmation, and your filed forms so you can verify the reported figures. |
| Noncovered security | Basis information may be omitted from required broker reporting, especially for older holdings. | Complete independent evidence of acquisition date, quantity, cost, commissions, adjustments, lot selection, and any reconstruction work. |
“Covered” does not mean the broker’s number is automatically correct, and “noncovered” does not mean basis is unknowable. It means your own records carry more of the substantiation burden.
How Form 1099-B, Form 8949, and Schedule D fit together
Form 1099-B
The broker files Form 1099-B for reportable securities sales and sends you a copy or substitute statement. Compare its proceeds, dates, basis, and adjustment codes with your transaction records. Investigate discrepancies before filing rather than assuming the statement captures every event.
Form 8949
Form 8949 reports sales and exchanges of capital assets and reconciles broker-reported information with the amounts reported on your return. Its instructions specifically call for records of purchase price including commissions, basis increases, and basis decreases. Use your lot and adjustment records to complete any fields that require a correction or explanation.
Schedule D
When required, Form 8949 feeds into Schedule D, which reports the resulting capital gains and losses. Keep the submitted Form 8949 and Schedule D together with the 1099-B and the underlying evidence; a schedule without its supporting records does not establish how basis was calculated.
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Federal retention is tied to the Internal Revenue Service limitations period for the return, not simply to the date you bought the shares. The IRS gives these general periods in Topic 305:
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| Situation | General period stated by the IRS | How it affects share-sale records |
|---|---|---|
| Ordinary income, deduction, or credit items | Three years, the general assessment period. | Keep the sale-year return and its supporting records at least until that period expires, subject to exceptions. |
| More than 25% of gross income omitted, or the specified foreign financial asset condition | Six years. | Records supporting the affected return may need to be retained for the longer period. |
| Claim involving a bad-debt deduction or loss from worthless securities | Seven years. | Use the period applicable to that claim, which can exceed the ordinary period. |
| Fraudulent return or no valid return filed | No limitation period. | There is no fixed federal cutoff for assessment in these circumstances. |
Returns filed before the due date are generally treated as filed on the due date for this calculation. The exact start date and which exception applies depend on the facts of the return.
Why property records last beyond the purchase date
The IRS rule for property is more important than the age of the shares: “Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition.” A purchase that occurred many years ago can still support the gain or loss on a sale this year. Do not discard acquisition confirmations merely because the ordinary period for the purchase-year return has passed.
For shares, preserve the complete basis history until the limitations period for the taxable disposition year expires. If a later event changes basis before the sale, keep the earlier records that explain the starting point and the later records that document each adjustment.
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- Create a lot-level file. For each sale, list the shares sold, acquisition dates, quantities, purchase prices, commissions, and the account in which they were held.
- Download the broker documents. Save the 1099-B or substitute statement, purchase confirmations, historical statements, sale confirmation, and fee detail in a durable format.
- Document adjustments. Add reinvested-dividend records, nondividend-distribution notices, stock-split records, and other corporate-action statements to the relevant lots.
- Reconcile the sale. Compare your lot-level proceeds and basis with the 1099-B. Note any broker adjustment code or amount that changes what belongs on Form 8949.
- File and preserve the tax forms. Save the submitted Form 8949, Schedule D when applicable, the complete return, and e-file acceptance or mailing evidence.
- Record the retention trigger. Note the taxable disposition year and the limitations period that applies, including any exception that could extend it.
What to do when records are missing
Ask the broker first
Contact the broker for archived confirmations, historical statements, lot information, and cost-basis data. Ask specifically for the acquisition date and quantity of each lot, not just a current account summary.
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Reconstruct the history
For older holdings, assemble available issuer records, transfer documents, dividend and distribution statements, prior account statements, and tax returns that show earlier transactions. Write down assumptions and separate documented amounts from estimates. The goal is an auditable chain from acquisition to sale.
Do not treat a blank 1099-B box as zero basis
A blank basis field for a noncovered security indicates that the broker did not have to report that information; it does not establish that your basis is zero. Use the best available evidence to determine the amount and retain that evidence.
Get tailored help for unusual holdings
Inherited shares, gifted shares, employee equity, wash-sale adjustments, reorganizations, and transfers can require rules beyond the basic purchase-price approach. When the available records do not establish basis or lot identity, consult the applicable IRS guidance or a qualified tax preparer before filing.
Common mistakes that create problems later
- Keeping only the 1099-B: it may omit basis for noncovered securities and cannot explain every adjustment.
- Ignoring commissions and fees: purchase costs generally affect basis, while sale costs must be reconciled to proceeds and reported amounts.
- Discarding old confirmations: an old purchase can determine the gain or loss in a much later taxable sale.
- Failing to identify lots: shares bought at different prices cannot be supported by an undifferentiated account total.
- Saving only a tax-software file: preserve the filed return and the source documents, not just an editable worksheet.
- Using the ordinary three-year rule automatically: six-year, seven-year, or no-limit circumstances can apply, and property records follow the disposition-year rule.
Scope and limits of this checklist
This guidance addresses U.S. federal individual income-tax recordkeeping after a share sale. State retention rules may differ. It also does not determine the correct basis for a particular inherited, gifted, employee, reorganized, or wash-sale position. Keep the documents that support your actual calculation and obtain situation-specific advice when the transaction history is incomplete or unusually complex.
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