2026 Tax Form FAQs

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.

Correction runs are tentatively scheduled in two-week intervals and are based on need. If your customers own Mutual Funds, Real Estate Trusts (REITs), REMIC securities or certain fixed investment trusts (WHFITs), issuers of these securities may publish income reclassification instructions after the original 1099 has been delivered. If your customers hold these securities or other securities subject to a reclassification event, they may receive a corrected Form 1099 which could impact your customers’ tax returns and filing dates.

Please note the collection and application of income reclassification instructions is compulsory for information reporting agents such as Apex Clearing. In order to better service our customers and provide a better experience for your 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 re-class 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).

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.

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 customer and the IRS.

If the activity in your customers’ accounts 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-DA

Form 1099-DA reports sales, trades, and exchanges of digital assets, such as cryptocurrency and NFTs. This form is new for tax year 2025.

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 to your customers.

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 your customers’ 1099-B is for informational purposes only and is not reported to the IRS. Your customers 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:

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:

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:

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.

1099-Q

1099-Q is used to report distributions from a Coverdell education savings account (ESA) or a 529 Plan.

5498-ESA

5498-ESA is used to report contributions or rollovers made to Coverdell education savings accounts (ESA).

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 a customer’s taxable investment account.

1099-Comp Summary of Corrected Info:

Qualified Charitable Distributions:

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%.

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.

For cost basis corrections, please send a detailed description of the issue to the Tax team by submitting a request via Apex Service Center (ASC).

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.

If a customer 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.

All customers with reportable information will be able to import their Consolidated 1099 information directly into Turbo Tax. In order to download this information, your customers will need to follow Intuit’s on-screen instructions.

Please note that the Turbo Tax application has data import limitations:

Logging into Turbo:

If you already use Apex Online or Ascend Workstation, then you will use those credentials to import your Consolidated 1099 data into TurboTax. If you do not utilize Apex Online or Ascend Workstation, then you will need to follow these steps.

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:

Additional information about wash sales: IRS publication 550.

Yes, Apex charges a fee (as detailed in the counterparty agreement) 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. Digital delivery allows your customers to have faster access to their tax forms and avoids the mailing fee altogether.

A $50 fee applies if a form has been electronically delivered but a correspondent requests in addition to be printed and mailed.

For Ascend, a user can learn to update to digital delivery here: https://support.apexfintechsolutions.com/hc/en-us/articles/23926168793239-Add-Digital-Delivery

For Classic: https://support.apexclearing.com/hc/en-us/articles/9875888155799-Add-E-Delivery-to-Account

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:

Special Note: Regarding MINTAX there are two options:

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.