I have mostly completed my federal tax return using TurboTax as I have for many years and have some tax due. My goal is now to address the sale of a second home as a nominee recipient and ultimately end up with the same tax due when I finish since all proceeds went to other family members.
1. If I read the IRS General Instructions for Certain Information Returns, it indicates that as a nominee recipient - You
must file a Form 1099 with the IRS (the same type of Form
1099 you received) for each of the other owners showing
the amounts allocable to each. I received a 1099-S from the title company. Does this mean I need to file a 1099-S for each family member who split the proceeds, or should this be a 1099-MISC or something else?
2. Is there a Turbotax product that I can use to file the 1099 (whichever kind it is) electronically now that the date to file by paper has passed?
3. How do I account for these 1099's for $ going from me to the recipients and end up with net zero result on my tax calculations? Note that the house was held long enough to be a long term capital gain. I tried to go into Less Common Income, Miscellaneous Income, Other Reportable Income, and add negative dollar amount line items there, but I ended up with a huge tax refund by the time I did all that. I think what is happening is that the negative dollar amounts in Other Reportable Income are applied as ordinary income subject to higher tax percentages than the proceeds from the 1099-S which are only long term capital gains. Is there an appropriate way in Turbotax to record the 1099's going from me to the people who received the proceeds?
