If you’ve sold a security or received interest or dividends in a taxable account, you’re among the hundreds of thousands of M1 customers who will receive a Consolidated 1099 Form.
The Consolidated 1099 Form combines several different IRS forms into one form, full of important information and sometimes difficult to interpret. We present this information in a way that looks different from the actual IRS forms to make it easier to understand. The following information breaks down the parts of a consolidated 1099 form.
Links to IRS forms are provided, along with a short explanation for each.
Page 1: Contains information reported on forms 1099-DIV, 1099-INT, and 1099-MISC.
Amounts on page 1 summarize all activity for that section. Summarized amounts are reported to the IRS. You can see details of each form later in the package.
1099-DIV: Dividends and Distributions
Reports dividend and distribution payments received in your Invest accounts
Please note: Companies that pay cash distributions during the year may “reclassify” those distributions later. This means that money you received as “dividends” in July may be reported as a different type of income on tax forms. Also, dividends for some companies are reported based on record date, rather than pay date. This means that you may see income reported that was received before or after the calendar year.
1099-DIV reports three main kinds of income and associated tax withheld: dividends, capital gains, and distributions that don’t fit into either of the first two categories.
Dividends - Lines 1a, 1b, 2e, 5, 12, 13
1a reports all dividend income received. The following boxes break out this amount into different types of dividends, which may be treated differently on your tax return.
1b reports qualified dividend income. This amount is included in 1. Please note that not all income reported in 1b may meet the holding requirement for qualified dividends.
5 reports Section 199A dividends. This amount is included in 1. This type of income may be eligible for preferential tax treatment.
Lines 2e, 12, and 13 report less common dividend income
Capital gains - Lines 2a, 2b, 2c, 2d, 2f
2a reports all capital gain income received
Lines 2b, 2c, 2d, and 2f report amounts included in Line 2a that may be subject to different treatment on the income tax return
Not dividends or capital gains – Boxes 3, 9, 10
3 reports non-dividend distributions, also known as “return of capital.” While this amount is not generally included in taxable income, there are certain situations where it may be taxable. When 3 income is considered nontaxable, it reduces the cost basis of the security that paid it dollar for dollar.
Lines 9 and 10 report less common types of income
Tax withheld – Lines 4, 7, 16
4 reports U.S. federal tax withheld
7 reports foreign tax withheld* on distributions from foreign securities. 8 may reflect the foreign country for which this tax was withheld; otherwise, review the 1099-DIV detail to determine which securities were subject to foreign withholding.
16 reports state tax withheld
Other lines on the 1099-DIV report less common information
1099-INT: Interest Income
Reports interest income received in your Invest and High Yield Cash accounts.
1 reports interest received during the calendar year
4 reports U.S. federal tax withheld
17 reports state tax withheld
Other lines on the 1099-INT report less common information
1099-MISC: Miscellaneous Information
Reports miscellaneous payments received
2 reports royalties received or deemed
3 reports income such as promotional, referral, or transfer bonuses. The IRS threshold for required reporting of this type of income is $600 for 2025 and prior years ($2500 beginning in 2026).
4 reports U.S. federal tax withheld
8 reports substitute payments received in lieu of dividends or interest this is common if you purchase securities on margin)
Other lines on the 1099-MISC report uncommon income and information
Regulated Futures Contracts and 1256 Options
This section reports certain activity from form 1099-B. Currently, M1 accounts do not require information in this section.
Page 2: Contains summary information not reported to the IRS
Summary of Sale Proceeds
Reflects a summary of all 1099-B information.
Form 1099-B reports trades and other taxable events that result in proceeds of at least $0.01. Summarized amounts here are not reported to the IRS.
Information for sells and events listed in the “Proceeds from Broker and Barter Exchange Transactions” section, beginning on page 3, are reported to the IRS.
Information reported to the IRS includes description, date of sale, proceeds, date acquired, and other data as required.
Short-term transactions: Includes reportable events for securities that have been held for one year or less.
Long-term transactions: Includes reportable events for securities that have been held for longer than one year.
Undetermined transactions: Includes reportable events for securities for which M1 and/or Apex Clearing does not have holding period information, and information for certain securities organized as trusts. If there is information in this section, you may also have a section titled “Widely Held Mortgage Trusts & Other Widely Held Fixed Investment Trusts,” later in the tax package.
Covered/Noncovered tax lots: When covered tax lots are sold or disposed, M1 is required to report cost basis information to the IRS. M1 does not report cost basis information to the IRS for noncovered tax lots, but basis will reflect on your tax form if M1 has the information, for your convenience.
Total Wash Sale Loss Disallowed: Reports loss amounts subject to wash sale rules
Original Issue Discount Summary
Reports information related to bond income. Currently, M1 accounts do not require information in this section.
Federal Tax Withheld
Reflects a summary of all U.S. federal tax withholding from all activity types.
State Tax Withheld
Reflects a summary of state tax withholding. If there is no state tax withholding, this section will be omitted.
Pages 3 and beyond
The remainder of your tax package contains details of the first two pages and may contain other sections depending on the activity in your M1 accounts.
Proceeds from Broker and Barter Exchange Transactions
This section reflects individual trades and events summarized on page 2. Events that result in at least $0.01 proceeds are reported here. In most cases, each tax lot sold is listed separately. However, if many small tax lots were sold on the same date, they may be combined. When a row reflects combined tax lots, the Date Acquired will show “Various.”
Under each different heading (Ex. Short term transactions for covered tax lots) instructions detail how to report the information on your income tax return. If you use tax preparation software, review the instructions for the form or schedule specified to ensure amounts are reportedly correctly.
Some of this information is reported to the IRS. Fields and columns that include a box number in the heading are reported. Information reported to the IRS differs for covered and noncovered tax lots.
The rightmost column, Additional Notes, provides more information about the event being reported. You may see the event type in this column (Sale, Merger, Liquidation, etc.). If the security may be subject to special tax treatment, you’ll see a note to that effect (Collectible, etc.) Footnotes may appear in this column that are explained at the end of the tax package.
Details of Forms 1099-DIV / 1099-INT / 1099-MISC
This section lists the individual income events that are summarized on page 1. Information in these sections is not reported to the IRS.
Widely Held Mortgage Trusts & Other Widely Held Fixed Investment Trusts
Certain types of securities organized as trusts are required to provide additional information to investors. Often these trusts invest in gold, silver, other precious metals, or energy-related industries. If your tax package includes this section, please visit the Investor Relations site for the securities listed to obtain tax information for the current year. Issuers provide information to help shareholders report tax information correctly on the income tax return.
Supplemental Information
This section lists information not reported elsewhere in the tax package. M1 does not report information in this section to the IRS.
Depending on activity in your M1 accounts, you may see the following:
Partnership Distributions
If you received a distribution from a security that is organized as a partnership, that income will reflect here. M1 does not report this income to the IRS because the partnership is required to report it on schedule K-1.
Fees & Expenses
Margin interest – if you purchase securities on margin
ADR fees – if you own depository receipts that charged fees during the year
Events that affect share quantity but are not required to be reported
Removal of worthless securities - does not include penny-for-lot removal of worthless securities. If sale of a tax lot results in at least $0.01 proceeds, the event will be included with 1099-B information.
Sales that result in zero proceeds
Expiration of rights and warrants
Footnotes
May contain explanation of earlier notes or information and links for investor relation sites of certain securities.
If you have questions about your Consolidated 1099, please contact us. M1 does not provide tax advice. If you have questions about how to report information shown in the consolidated 1099 on your income tax return, we recommend reviewing IRS guidance and reaching out to a qualified tax professional.
M1 and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
This content was generated using artificial intelligence and is intended for informational and educational purposes only. While reasonable efforts are made to ensure accuracy, AI-generated outputs may omit key context; and should not be construed as financial, investment, legal, or tax advice. Users should independently verify all information and consult a qualified professional before making any financial decisions.
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