What are Adjustments?

The "Adjustments" column on a Form 1099-B report typically includes information related to adjustments to the cost basis of a security. This may include, but is not limited to:

1. Wash Sale Adjustments: If a security is sold at a loss and a substantially identical security is purchased within 30 days before or after the sale, the loss is typically disallowed for current tax reporting due to the wash sale rule. The disallowed loss is added to the cost basis of the newly purchased security.

2. Gifts and Inheritances: Adjustments may be made to the cost basis of securities that were acquired as gifts or inheritances, as their cost basis might be different from the original purchase price.

3. Corporate Actions: Adjustments may be necessary due to corporate actions like stock splits, mergers, or spin-offs, which can affect the cost basis of the holdings.

4. Noncovered Securities: For securities that are not covered under the IRS cost basis reporting rules (i.e., purchased before the effective dates of these rules), brokers might not report the cost basis to the IRS. In such cases, investors are responsible for reporting the correct basis, and adjustments may be needed.

5. Other Adjustments: There might be other specific situations that require adjustments to the cost basis, such as changes due to broker errors, returns of capital, or other unique scenarios.

It's important to review these adjustments carefully, as they can impact the calculation of capital gains or losses for tax purposes. If you're unsure about any adjustments reported on your Form 1099-B, please consult with a tax professional.