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You have to accurately report your basis regardless if it is covered or not.

Any transaction that is coded as covered, simply means your brokerage firm is required to report your basis on your 1099-B. A non-covered transaction is one where you may have initiated your position prior to the IRS implementing rules requiring brokerages to track and report your basis.

It's in your best interest to report your basis, especially if you have a loss. If you have a gain, you still want to report your basis so that you only pay on your gain and not your entire sale amount.

When reporting covered transactions, make sure your basis entry matches your 1099-B, or you are ripe to get a love not from the treasury.
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