iFlip is pleased to share the following Frequently Asked Questions (FAQ) regarding the upcoming 2025 tax reporting season, originally provided by our clearing broker Apex Clearing. Note that Apex Clearing generates and provides all tax reporting. When delivered you can access your tax documents from the iFlip application in the Documents section.
If you have additional questions or need help with a specific issue, please contact our support team at support@iflipinvest.com.
What tax forms does Apex generate and when will they be delivered?
Based on the presence of reportable activity, Apex will create the tax forms listed on the following pages for any customer account held on our books and set-up for reporting. Apex is required to deliver these forms to the account holder by the regulatory due dates, below.
Self-directed retirement accounts with IRA Club or any other self-directed custodian will not get tax reporting from Apex. Any reporting is provided by the self-directed custodian.
Please note the collection and application of income reclassification instructions is compulsory for information reporting agents such as Apex Clearing. In order to provide a better experience for account holders, Apex may place a hold on issuing amended tax forms to consolidate these instructions and lessen the number of amended forms provided to your customers.
A list of potential securities that may be reclassified has been provided and can be found here for your convenience. This list is a guide based on the previous year's reclassifications. As such, this security listing is a best effort and there is no guarantee that securities listed will reclass again in 2025 or that the list is 100% accurate, as new securities could be added in the coming months.
The following table provides the Regulatory due dates for the corresponding tax forms (dates below are adjusted to account for non-business days).
What are the IRA contribution limits and deadlines for 2025?
Beginning in 2025, the IRS contribution limit increased to $7,000 ($8,000 for individuals age 50 or older).
The deadline to make a 2025 IRA contribution is normally by filing due date excluding any extensions. For most, that deadline is April 15, 2026.
Who receives a Consolidated 1099?
A consolidated 1099 is a grouping together into one statement of all the 1099 tax information for an account provided by Apex Clearing to be used in preparation of your annual tax return.
All individuals receive a Consolidated 1099 if they are United States citizens or legal residents and have had reportable tax activity. In some cases, exempt recipients will receive a Consolidated 1099 if charged backup withholding on activities during the year. These amounts must be reported to the account holder and the IRS.
Why wasn’t a 1099 generated for activity in a particular account?
If the activity in an account did not meet certain reporting thresholds set by the IRS, a tax form will not be issued. De minimis values differ by form and income type. For dividends and interest, de minimis is $10.00; for Cash In Lieu $20.00, for miscellaneous income $600.00.
If the account is set up as a C Corp, a 1099 will not be generated.
Additional details regarding de minimis values have been provided with the forms identified in the next section of this FAQ.
1099-K
Form 1099-K is used to report payments received for goods or services through payment cards (credit, debit, gift cards) and third-party payment networks like PayPal, Venmo, and online marketplaces (eBay, Etsy, Uber, etc.). ***Please note that the federal de minimis threshold requires reporting only if income exceeds $20,000. Several states, however, have lower de minimis thresholds – these are for reporting purposes only. Apex will ensure all forms that match or exceed the federal threshold will be produced for the account holder and submitted to the IRS.
1099-B
A Form 1099-B reports all sales or redemptions of securities, futures transactions, commodities, options and barter exchange transactions. Cash in Lieu may be subject to a de minimis reporting if under $20.00.
As a reminder, closing transactions for identical securities and orders with the same disposition dates will be combined into fewer transactions. This change simplifies the presentation of the information being reported on Form 1099-B for the account holder.
Form 1099-B will be filed for any person for whom Apex withheld any federal tax under the backup withholding rules regardless of the amount.
Note: For non-covered securities, the cost basis information provided on the account holder’s 1099-B is for informational purposes only and is not reported to the IRS. The account holder will be responsible for providing this information when they file their returns.
1099-DIV
A 1099-DIV reports distributions such as dividends, capital gain distributions, or nontaxable distributions, that were paid on stock and liquidation distributions if any of the following applies:
- Received $10.00 or more in dividends, including capital gains, exempt interest and other stock distributions
- Had any withholding amounts or any foreign tax on dividends and other distributions on stock
- Received any payments of at least $600 as part of the liquidation process
Dividend payments received on securities loaned out are reported as substitute payments in lieu of dividends on Form 1099-MISC.
1099-OID
The 1099-OID reports the amortization of bond interest on discounted bonds annually. Original Issue Discount (OID) is the difference between an obligation’s stated redemption price at maturity and the issue price of the debt instrument.
Interest on bonds sold at a discount at the time that a bond or other debt instrument is issued and accreted annually is called Original Issue Discount or OID. Interest income is recognized, and the cost basis of the bond is increased.
1099-OID will be issued if the following applies:
- If the total daily portions or the original issue discount (OID) for a holder is at least $10.00
- For any person who had withholding and paid any foreign tax on OID or
- For any person who had withholding (and did not refund) any federal income tax under backup withholding rules, even if the amount of the OID is less than $10.00
1099-INT
Form 1099 INT reports interest income including taxable and tax-exempt interest dividends from mutual funds paid during the year.
De minimis amount is $10.00 or more and are reported in boxes 1, 3 and 8.
Tax-exempt interest is generally not subject to federal taxation. If you own municipal bonds, then interest on bonds from your home state is generally not subject to state tax. However, municipal interest from other states is taxed in your home state.
Interest payments received on interest producing securities loaned out are reported as substitute payments in lieu of interest on Form 1099-MISC.
Form 1099-INT will be issued to any person for whom you withheld and paid any foreign tax or from whom you withheld (and did not refund) any federal income tax under the backup withholding rules regardless of the amount.
Please note: If you have a margin account, you may have margin interest expenses paid from your account. Margin interest is included as an informational item in your Consolidated 1099 in the supplemental section. Please consult your tax advisor for the proper treatment and reporting of margin interest paid on your tax return.
1099-MISC
1099 Misc reports substitute payments in lieu of dividends or interest received in your account, stock or cash rewards, stock loan fees received and royalty payments. Payments of royalties are generally from investments in natural resource companies.
Threshold amounts are amounts greater than $10.00 in royalty payments, rewards, in lieu of dividends or interest and $600.00 or more of miscellaneous income.
1099-C
Form 1099-C is used by Financial Institutions (creditors) to report the cancellation of debt owed to the debtors totaling $600 or more. Debtors can be individuals, corporations, partnerships, trusts, estates, associations or companies.
Writing off debit balances in a client account can result in a 1099-C being generated for aggregated amounts exceeding $600.
Here are some exclusions Bankruptcy or insolvency:
- Student loan forgiveness
- Death or disability of a student loan holder
- Write-off of debit balance resulting from a Fee
1099-R
Form 1099-R reports distributions from Traditional, Roth, SEP and Rollover IRA.
De minimis amounts apply for distributions to be reported amounts need to be greater than $10.00.
Direct rollovers from an employer- sponsored retirement plan (401-k, 403-B, 457-B or annuity) to a Traditional IRA or rollover account are reported as distributions; the offsetting side for these distributions are the rollover amounts reported on Form 5498 for the IRA account in receipt of the distribution.
Transfer of funds in your IRA from one trustee/custodian directly to another IRA is not considered a rollover or distribution. Trustee to trustee transfers are not required to be reported on Form 1099-R.
Most Common Distribution Reason Codes:
5498
Form 5498 reports retirement plan contributions (including rollover contributions) to any individual retirement arrangement, including a SEP, SIMPLE, and Roth IRA; Roth conversions; IRA recharacterizations; and the fair market value of the account as of December 31.
5498’s are not required to be filed with a customer’s personal tax return. These forms are issued no later than May 31 each calendar year. The timing of this form is a result of contributions for the prior year may be made up to the filing date of customers' income tax return, generally April 15.
2439
Form 2439 is used to report undistributed long-term capital gains to shareholders of a regulated investment company (RIC) or real estate investment trusts (REIT) and undistributed capital gains allocable to them. A separate Form2439 will be issued for each investment.
The Undistributed capital gains reported on Form 2439 should be reported in addition to any capital gains reported on Form 1099-DIV. Please see details in IRS Publication 550.
1042-S
Form 1042-S is used to report US-source income earned by non-US persons subject to US withholding tax, including interest, dividends and substitute payments on their account for the year. You may receive multiple Forms 1042-S, each of which reports a different type of income.
Most Common Income Codes:
If income is exempt from withholding tax a code indicating this appears in Box 6.
The most common exemption codes are:
Puerto Rico 480 Series
The 480 Series forms are only issued to Puerto Rico residents who earned reportable income and/or had income subject to Puerto Rico tax withholding.
Apex issues three separate Series 480 forms for clients who reside in Puerto Rico: Series 480.6A, 480.6B and 480.6D.
Form 480.6A reports any taxable dividends and/or gross proceeds from realized capital gains or losses in a customer's taxable investment account. This form will also report any interest paid out in a cash account.
Form 480.6B is intended for information reporting on income not subject to withholding.
Form 480.6D reports any tax-exempt dividends that were distributed in an account holder’s taxable investment account.
What’s new for Tax Year 2025:
1099-Comp Summary of Corrected Info:
- A new section will be present on corrected Form 1099-Comp forms that detail the change that resulted in a corrected tax form. Previous value, new value, and the delta of the change will be shown.
Qualified Charitable Distributions:
- Distribution Code Y7 - A charitable contribution is a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value.
Common Questions Answered
What is backup withholding?
Backup withholding requirements are governed by the IRS and are required to be enforced by all withholding agents on all non-exempt individuals and entities.
Backup withholding is required to be reported on the appropriate Form 1099 regardless of the amount withheld. The $10.00 de minimis rule does not apply when backup withholding has occurred.
As a reminder, the current backup withholding rate is 24%.
How does a corporation report earnings when no 1099s are received?
- C-Corporations are generally responsible for reporting any earnings that they receive based on financial statements that the company reports.
- S-Corporations, if declared, will receive a Form 1099 for their sales of covered securities from Apex Clearing Corporation.
What happens when a client has the wrong TIN reported on the 1099?
In order to help alleviate these types of issues, please review and validate your account set-ups and obtain a valid W9 or W8 before tax forms are issued.
How can I correct my cost basis that is reported on my 1099?
For cost basis corrections, please send a detailed description of the issue to support@iflipinvest.com
Alternatively, if the cost basis information that is reported on your Form 1099-B is incorrect, you can report a correction to the IRS using Form 8949 when filing your income tax return.
How do I make a Mark to Market election?
If an account holder is eligible for trader status, they have the option to make a timely election for the Section 475 accounting method on securities and/or commodities. Section 475 is mark-to market (MTM) accounting with ordinary gain or loss treatment. Without it, securities traders use the cash method with capital gains and loss treatment, including wash sale loss adjustments and the annual $3,000 capital loss limitation.
Please keep in mind that this election cannot be retroactively applied. It is effective from the point in time that it is received and acknowledged by Apex Clearing going forward.
The following is the criteria we require to process MTM requests: written notice that they have made a valid and timely mark to market election under section 475; identify the specific account containing only securities subject to this election; confirm that that the account will only hold securities subject to this election; a copy of the supporting documentation, if possible, of how they made that election; Applies to the current tax year.
Are there any updates for TurboTax?
All account holders with reportable information will be able to import their Consolidated 1099 information directly into Turbo Tax. In order to download this information, the account holder will need to follow Intuit’s on-screen instructions.
Please note that the Turbo Tax application has data import limitations:
- If there are more than 500 1099-B transactions per return, then the customer will need to utilize the desktop software version which can accommodate up to 2,200 1099-B transactions per return.
- If the account holder has a total number of transactions that exceed these limits, they will not be able to use the TurboTax import function and may have to utilize other means to file their return.
Logging into Turbo:
You will need to follow these steps.
- In the Apex User ID field, you will need to enter your account number. For example, account XXX12345 would enter XXX12345 as your username.
- In the Apex Password field, you will enter the Tax ID number that is associated with the account. For most customers, this will be your Social Security Number; however, if your account is an entity account, then it may be a Tax ID number.
- Click Continue.
- Once you have clicked on Continue and your login credentials are validated, you will be presented with a screen identifying which forms and information are available for import.
- Next, follow the on-screen instructions to select the information you wish to include.
What is a wash sale?
The IRS does not allow you to deduct losses from sales or trades of stock or securities in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities.
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
- Buy substantially identical stock or securities;
- Acquire substantially identical stock or securities in a fully taxable trade;
- Acquire a contract or option to buy substantially identical stock or securities; or
- Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.
Additional information about wash sales: IRS publication 550.
Does Apex charge for the mailing of tax forms?
Yes, Apex charges a fee for the mail delivery of a tax form that can be provided to the customer via digital delivery. This fee is assessed and charged to the correspondent for any account that requires a mailed tax form.
Digital delivery is an alternative option to avoid this mail delivery fee. Your tax documents can be found in the documents section of the iFlip app.
A $50 fee applies if a form has been electronically delivered but an account holder requests a mailed copy.
If you would like your tax documents mailed contact support@iflipinvest.com.
What cost basis lot relief methods does Apex offer?
FIFO: First In First Out
Tax lots with the oldest purchase date will be sold first. This method ensures that if there are any shares eligible for long-term capital gains treatment, they will be sold first. Non-covered unallocated lots (lots without cost) will be sold before non-covered allocated lots (lots with cost).
LIFO: Last In First Out
Tax lots with the most recent purchase date will be sold first.
Versus Purchase (VSP) Specific Lot Identification
Specific lot identification can be made by including details about the tax lot in the trade trailer.
HIFO: Highest In First Out
Tax lots with the highest cost basis are sold first, regardless of when they were purchased. Because the highest cost basis shares are sold first, this method will harvest tax lots with losses first and then gains. It does not consider LT/ST, so if there is a tie between lots, FIFO is used.
MinTax: Minimum Tax
Apex will determine the best lot to sell to minimize tax impact and lower tax burden. The lots are selected in the following order:
- Short-term capital loss, from the biggest loss to the smallest
- Long-term capital loss, from the biggest loss to the smallest
- Short-term zero gain/loss
- Long-term zero gain/loss
- Long-term capital gains, from the smallest gain to the biggest
- Short-term capital gains, from the smallest gain to the biggest
Special Note: Regarding MINTAX there are two options:
- MINTAX all securities
- MINTAX all securities except Mutual Funds. Average cost for Mutual Funds.
Need additional information?
All tax documents are available on the IRS website, www.irs.gov, and include instructions or updates. While Apex makes every effort to ensure that the information being reported is accurate, please note that the taxpayer is ultimately responsible for the accuracy and completeness of the tax returns that are filed on their behalf.
If you have any issues or questions, please contact support@iflipinvest.com.
Thank you,
Flip Support Team