A brokerage statement can report sale proceeds while leaving the cost or other basis blank. That gap matters because proceeds and basis are separate inputs to the transaction record. If a document workflow turns an empty Box 1e into 0, it has changed “not reported here” into a financial value the source did not provide.
The distinction is especially visible on a noncovered security. The IRS Instructions for Form 1099-B say Box 5 identifies a noncovered security. They also say that when a filer is not reporting basis for a noncovered security, Box 1e is left blank; zero is entered only when the security actually had a zero basis. The statement’s blank is therefore a meaningful state of the document, even before anyone decides what basis belongs on a return.
Read the boxes together
Do not interpret Box 1e alone. Preserve the surrounding indicators and the statement page that contains them:
| Form 1099-B field | What the document says | Extraction treatment |
|---|---|---|
| Box 1d | Proceeds from the transaction | Capture the reported amount and source location. |
| Box 1e | Cost or other basis, which may be blank | Keep blank distinct from zero and from a value not detected by OCR. |
| Box 5 | Whether the security is noncovered | Record the checkbox state, including unreadable or uncertain states. |
| Box 12 | Whether basis was reported to the IRS | Capture the indicator separately from the amount in Box 1e. |
A blank amount, a printed zero, and a box the extraction system could not read are three different records. Store them separately: blank, 0, and unreadable are not interchangeable. Retain the source image or page and the field coordinates so a reviewer can see what the model saw.
Follow the basis to its source
The Instructions for Form 8949 (2025) tell filers to enter the correct basis for a noncovered security when no basis is shown or when the basis shown was not reported to the IRS. The instructions also describe how transactions are grouped on Form 8949 based on whether basis was reported. That makes the reporting indicator part of the evidence, not a substitute for the basis itself.
For an extraction workflow, the next step is a reconciliation queue. The system can link the sale row to the relevant acquisition record, transfer statement, or other source document and show where a candidate value came from. A person responsible for the return can then determine whether the records refer to the same security and lot, and whether any adjustment applies. The system should not fill the blank from a market quote, a neighboring lot, or an inferred average.
- Keep the source value intact — preserve the blank in Box 1e, the Box 5 and Box 12 states, proceeds, and the page reference.
- Match before joining — compare the security identifier, acquisition date, quantity, account, and transfer history; surface mismatches instead of silently selecting a lot.
- Route unresolved basis — present linked records and their provenance to the tax preparer or reviewer, with the missing value visible.
Missing is not the same as zero
Consider a statement with $5,000 of proceeds and a blank basis field. An extraction record can report the $5,000, mark basis as not present in that field, and flag the row for supporting records. It cannot calculate a gain by treating the blank as $0. A genuine zero basis is a separate source-backed value and should carry its own evidence.
That rule also helps with quality checks. When basis is absent, the software should not emit a complete-looking gain or loss. It should return the measured fields, the reason the row is incomplete, and the evidence needed for a human review. Confidence in OCR does not establish that a document contains a value it never printed.
Keep a reviewable record
A useful transaction record connects each value to its source: statement name and version, page, row, field label, extracted text, normalized amount, checkbox state, and reviewer action. If a second document supplies a candidate basis, keep both sources and show the match that connected them. A later correction should preserve the original extraction and the reason the value changed.
Noncovered does not mean that basis is unknowable; it means the broker’s reporting obligation is different for that security. Which records establish the correct basis depends on the transaction history and applicable rules. A tax professional should resolve the return treatment. This article describes document handling and extraction controls, not tax advice.
Sources and scope
- Internal Revenue Service, Instructions for Form 8949 (2025) — categories for transactions with basis not reported to the IRS and instructions for Column (e), Cost or Other Basis. Read the instructions.
- Internal Revenue Service, Instructions for Form 1099-B (2026) — Box 1e and the noncovered-security indicator in Box 5. Read the instructions.
Form instructions can change by tax year. Confirm the instructions for the return being prepared and route tax judgments to a qualified reviewer. Cogneris can support source-linked document workflows; implementation scope depends on the documents and review process.
Preserve the gap until it is resolved
A missing basis is useful information: it tells the reviewer where the evidence stops. Keep the amount blank, the reporting indicators visible, and the acquisition records linked for review. The resulting record is more useful than a filled-in zero because it shows what the broker reported, what remains unknown, and who can resolve it.
For another tax-form workflow, see how a missing Schedule K-1 is tracked without inventing its contents. The accounting workflow overview describes document extraction and review at a broader level.