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Hi, thank you so much for taking the time to reply. This has been such a confusing experience and ordeal!

So it seems like the nominee adjustment in Turbotax does not work at all like I was hoping. I am just learning now about issuing at 1099-DIV to her sister but I also see that we may be past that deadline. If we are able to issue those 1099-DIV's, is it ok to just reduce the amounts directly to reflect my wife's 55% share? In your example: $55,000, $5500 and $11000, then not use any nominee adjustment? Then have her sister do the same thing (only claim $45,000, $4500, and $9000)? Same question for the 1099-INT and 1099-B.

 

For the 1099-B what do you mean enter a negative or positive amount against the lost? For example, in one transaction if the proceeds were $500, costs basis of $400 and gains of $100, are you saying just adjust the gain to be $55? Wouldn't that look weird since the gain plus cost basis does not equal the stated proceeds?

Last but not least - would it be acceptable if one party reports all the 1099's related to this count if the other partner doesn't report it at all? In other words, the primary (my wife) reports 100% of the interest, dividends and gains/losses - taking the tax benefits or losses, in the interest of keeping things simple?