what is a noncovered security 
a noncovered security is a designation given by the u s securities and exchange commission sec which means a brokerage is not required to report the cost basis of that security to the irs the adjusted cost basis of non covered securities is only reported to the taxpayer not to the irs noncovered securities are generally small and limited in scope however the income from the sale of a noncovered security may still be taxable in which case the taxpayer would need to report it to the irs on their tax return 