You Make the Call - July 16, 2026

Question: Jordan Lee is preparing a 2025 Form 1040, U.S. Individual Income Tax Return. Lee received one consolidated brokerage tax statement that includes Form 1099-DIV, Dividends and Distributions, and Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, information. The Form 1099-DIV section shows $1,200 of ordinary dividends in Box 1a and $900 of qualified dividends in Box 1b. The Form 1099-B section shows short-term covered stock sales, basis reported to the Internal Revenue Service (IRS), with Box 1d showing $7,800 in proceeds and Box 1e showing $9,100 in basis. It also shows long-term covered stock sales, basis reported to the IRS, with Box 1d showing $22,400 in proceeds and Box 1e showing $18,950 in basis. The statement shows no wash sale loss disallowed, no other adjustments, no ordinary-income treatment, no checked qualified opportunity fund (QOF) box, and no QOF deferral or termination. Lee had no other investment income, capital transactions, capital loss carryover, foreign accounts, nominee dividends or other filing trigger for Schedule B (Form 1040), Interest and Ordinary Dividends. 

How should Lee report the dividend and stock sale information on the 2025 return? 

Answer: Lee should report the dividend information separately from the stock sale information based on the Form 1099-DIV section shown on the consolidated brokerage tax statement. 

Lee reports $1,200 of ordinary dividends on Form 1040, Line 3b, and $900 of qualified dividends on Form 1040, Line 3a. Lee does not add Box 1a and Box 1b together because qualified dividends are included in the ordinary dividend total. Lee does not file Schedule B (Form 1040) because Lee has $1,500 or less of ordinary dividends and no other Schedule B (Form 1040) filing trigger. 

Lee reports the stock sales on Schedule D (Form 1040), Capital Gains and Losses. Lee does not file Form 8949, Sales and Other Dispositions of Capital Assets, for these sales because the Form 1099-B information shows covered transactions with basis reported to the IRS and no adjustments. 

Section 61(a)(7) includes dividends in gross income. Section 1001(a) determines gain or loss from the sale or disposition of property by comparing the amount realized with adjusted basis. Section 1222 defines short-term and long-term capital gains and losses based on holding period. 

Lee enters the short-term totals on Schedule D, Line 1a, with a $1,300 short-term capital loss ($7,800 - $9,100 = -$1,300). Lee enters the long-term totals on Schedule D, Line 8a, with a $3,450 long-term capital gain ($22,400 - $18,950 = $3,450). Schedule D combines the amounts for a $2,150 net capital gain, which Lee reports on Form 1040, Line 7a.