You can
report the interest income on your return and specify that it is nominee
interest. To do so within TurboTax, use
these steps to revisit the interest section of your tax return:
On the top row of the
TurboTax online screen, click on Search (or for CD/downloaded TurboTax
locate the search box in the upper right corner)
This opens a box where you
can type in “1099-INT” (be sure to enter exactly as shown here) and
click the magnifying glass (or for CD/downloaded TurboTax, click Find)
The search results will
give you an option to “Jump to 1099-INT”
- Click on the blue “Jump
to 1099-INT” link
This will bring you to a summary of interest forms already
entered. Click Edit beside the one with the nominee amount.
After you
click Continue when you have
finished entering the information from your Form 1099-INT, the next screen is
titled “Tell us if any of these uncommon
situation apply to you”.
The second
choice on this screen is “I need to
adjust my taxable amount”.
Check this
box and click Continue.
Then you
will see a screen titled “Report
Interest adjustment”.
Enter the
amount as a positive number and the reason for the adjustment. This will make the proper entry on your
Schedule B.
Also, take
a look at the IRS Topic 403
– Interest Received for more details about the next step to take so that
the actual owner of the interest is properly notified.
