Both -- Report the entire amount on your return, and then make a nominee adjustment for your brother's half of the proceeds using the instructions below. You should issue a 1099-R to your brother and send a copy along with Form 1096 to the IRS. [The 1096 form is a cover sheet sent to the IRS along with the 1099.]
Enter the full amounts listed on the 1099-R in your return. You can enter the nominee adjustment in the Less Common Income section in TurboTax using these steps:
- Click on Federal > Wages & Income
- In the Less Common Income section , click on the Start/Update box next to Miscellaneous Income, 1099-A, 1099-COn the Miscellaneous Income screen, click on the Start/Revisit box next to Other reportable income.
- On the Any Other Taxable Income? screen, click the Yes box.
- Add your brother's amount as a negative number and put nominee adjustment as the description on the next screen, Other Taxable Income.
- This amount will appear on line 8 of the 1040 (Other Income from Schedule 1) and reduce the amount you are being taxed on.
Since you only have one form to prepare, you can download the forms and instructions from the IRS website:
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