I am asking the insurance co to split the proceeds and send 2 1099-R forms showing the actual taxable amount for both of us, but if they can't how do I do this if it's all reported under my social, when I do my taxes next year? I would like to verify this on Turbo Tax and do a test with a copy of my taxes from this year (just to test it out). I say another response regarding nominee for 1099-INT but would like the instructions for a 1099-R. Also, what do I need to file with the IRS (either paper or online) to designate him as a nominee for the amount of $ that will be sent to him showing his taxable amount?
There can be more than one beneficiary on a policy. Is it your policy and your brother is your beneficiary?
I know of no way to do that when a 1099-R is involved. The IRS gets a copy form the issuer and expects to see that on your tax return. There would be nothing on the 1099-R to indicate that anyone but you received the money.
This does not seem right. How are they paying - one check or two and whose name is the check made out to?
I would think you need to look at the terms of the policy and how the owners are listed - joint owners or "and/or" and how that are to pay each owner.
User @dmertz - any insight here?
I'm sure the Line 21 stuff can be done in TurboTax, but as far as attaching a statement and still be able to e-file, I'm not sure TT can do that.
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This is for 1099-INT and it looks like TT can handle this so I would assume it can handle the same for a 1099R?
I guess my other question is then how do I generate a 1099-MISC statement ?
Is that something generated via the TT program when I file next year and then just send it to my brother or do I also send him a copy of my 1099R just for his records?
Lisa995 is correct. You can show a negative number in Line 21 with the caption, “Distribution to Nominee YYY, SSN xxx-xx-xxxx.” The negative number on Line 21 will adjust the income of the reported payee to the correct amount. The reported payee will issue a Form 1099-MISC to the nominee payee for nominee’s share of the distribution.
You can enter a negative income adjustment with the following menu path:
- Federal Taxes
- Wages & Income
- Less Common Income
- Miscellaneous Income
- Other Reportable Income
- Other Taxable Income
- Description = “Distribution to Nominee YYY, SSN xxx-xx-xxxx”
- Amount = -$xxx
TurboTax will transfer this to your Form 1040, Line 21, Page 1.
You can e-file with this approach because the disclosure is on the face of the return at Line 21. Consequently, you do not need to attach a statement.
What you have to do is use form 1096 to get the IRS to sed you a 1099R to fill out. I always have to wait on the forms as they usually aren't available yet for the upcoming tax year.
So here is my question. As the owner of an annuity that is my daughters money, when I take money out for her I do the 1096/1099 forms. This transfers it all to her and not to me. However when she gets the 1099R form from me does she incur penalties when she reports it? She would be penalized if this was in her social and the payout came direct to her from the annuity company. I never considered this before....the difference is between 20% and 30% if she's penalized.