Updated October 17, 2026. Quick answer: Code T goes in column (f) of Form 8949 when box 2 of Form 1099-B or box 6 of Form 1099-DA shows the wrong type of gain or loss. You report the transaction on the correct part of Form 8949, Part I for short term or Part II for long term, rather than the part the form implies.
What code T means
The column (f) table describes the situation: “You received a Form 1099-B or Form 1099-DA (or substitute statement) and the type of gain (or loss) shown in box 2 on Form 1099-B or box 6 on Form 1099-DA is incorrect”. The instruction is “Report the transaction on the correct part of Form 8949”. The row also says to enter zero in column (g) on that part of the form if there are no adjustments needed for the transaction.
What the broker’s boxes tell you is covered on the 1099-B box 2 page and the Form 1099-DA box 6 page.
What box 2 and box 6 do
The instructions say that “box 2 on Form 1099-B or box 6 on Form 1099-DA may help you determine whether your gain (or loss) is short term, long term, or subject to special rules.” The word may matters: the box is a help, and the holding period is what decides the part.
If the box is empty, the broker may not know. “If box 2 on Form 1099-B or box 6 on Form 1099-DA is blank and code X is in the “Applicable checkbox on Form 8949″ box near the top of Form 1099-B or Form 1099-DA, your broker doesn’t know whether your gain (or loss) is short term or long term.” The instruction is “Use your own records to determine whether your gain (or loss) is short term or long term.”
Choosing the correct part
The instructions define the two parts by holding period: “The holding period for short-term capital gains and losses is generally 1 year or less.” “The holding period for long-term capital gains and losses is generally more than 1 year.” For short term, “Report these transactions on Part I of Form 8949”. For long term, “Report these transactions on Part II of Form 8949”. To count the days, “To figure the holding period, begin counting on the day after you received the property and include the day you disposed of it.”
Form 8949 boxes A to L lists the boxes at the top of each part. The 1099-B boxes that bear on the choice are on the 1099-B box 5 and box 12 page.
How to report it
Enter code T in column (f) of the row you place on the correct part. If an adjustment is also needed, such as an incorrect basis, that adjustment goes in column (g) with its own code, and the codes are written together. The instructions say “Don’t separate the codes by a space or comma.” See Form 8949 code B for the basis case.
Where it goes next
Column (h) is figured one row at a time. The instructions say “Figure gain (or loss) on each row. First, subtract the cost or other basis in column (e) from the proceeds (sales price) in column (d). Then take into account any adjustments in column (g).” The form’s own column heading says the same: “Subtract column (e) from column (d) and combine the result with column (g).”
The rows then roll up to Schedule D. The instructions say “Include on your Schedule D the totals from all your Parts I and II.” and “Complete Form 8949 before you complete lines 1b, 2, 3, 8b, 9, or 10 of Schedule D.” The overview is on Form 8949 instructions.
Edition and line numbers
This page reads the 2025 Form 8949 and its 2025 instructions the current files irs.gov served on 2026-10-17. They are the forms for the tax year 2025 return, filed in 2026. Check the tax year printed on the form you are filling in and use the column letters and codes on that year’s form, because a different year’s form can word its columns and codes differently.
Common mistakes
- Following a wrong box 2 or box 6 without checking. The instructions say the box “may help you determine whether your gain (or loss) is short term, long term, or subject to special rules.”
- Guessing when the box is blank. The instructions say “Use your own records to determine whether your gain (or loss) is short term or long term.”
- Counting the holding period from the purchase date itself. The instructions say “begin counting on the day after you received the property”.
Related: 1099-B box 2 short term or long term, Form 1099-DA box 6 gain or loss type, 1099-B box 5 and box 12, Schedule D, and Form 8949 instructions.
Sources
- Instructions for Form 8949 (2025): https://www.irs.gov/pub/irs-pdf/i8949.pdf
- Form 8949 (2025): https://www.irs.gov/pub/irs-pdf/f8949.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.