I received my Tradestation 1099B and noticed an issue where for Short Option Trades closed out at a loss, Proceeds & Cost are reported as Zero and net actual Net loss on trade reported correctly in the Net Gain/Loss column. There are no adjustments as it's not a wash sale. Prior year's Net Proceeds were reported as a negative amount equal to the loss with a cost of Zero.
Anyone else seeing a similar issue or dealt with a similar issue?
More detailed Explanation:
There is a significant change in how short option losses are being reported on the 2025 1099-B compared to the 2024 filing year. Specifically, for short positions closed at a loss:
- 2024 Methodology: The broker reported the net loss as a negative value in the Proceeds column (Column D), with $0 in the Cost Basis column (Column E).
- Example: Sell Put for $50, Buy to Close for $200 = -$150 Proceeds | $0 Cost | $150 Loss.
- 2025 Methodology: The broker is reporting $0 in both Proceeds (Column D) and Cost Basis (Column E), yet still recording the full loss in the Gain/Loss column.
- Example: Sell Put for $50, Buy to Close for $200 = $0 Proceeds | $0 Cost | $150 Loss.
The Impact:
The 2025 reporting method is mathematically inconsistent. Because $(Proceeds – Cost) is Not Equal to Gain/Loss$, the "Sum of Proceeds" at the bottom of the 1099-B is being artificially inflated by the absolute value of these losses. This creates a reconciliation nightmare when trying to tie total proceeds back to actual cash flow or trade logs.
Posted by abdallas1968