Form 1099-B is an IRS tax form specifically used for reporting the sale of private company stock. When you sell shares of stock in a private startup or small business, the broker-dealer or financial institution involved will provide you with a Form 1099-B to document the transaction. This form is mandatory, and essential for calculating capital gains or losses on your federal and state income tax returns.

The purpose of Form 1099-B is to report the proceeds from the sale of capital assets, such as privately held company shares. Unlike publicly traded stocks, the sale of private company stock may involve additional complexities, such as valuations and stock option exercises, which need to be accurately reflected on the form. By receiving and properly utilizing Form 1099-B, you can ensure that you comply with tax regulations and accurately report your capital gains or losses from the sale of private company stock.

It is important to consult with a tax professional or advisor familiar with the intricacies of private company stock sales to ensure that you correctly interpret and utilize the information provided on Form 1099-B for accurate tax reporting.