If the 1099-B is in your wife's name and SSN, she will enter it in her tax return. If the Cost Basis of the Investment sold is correct on the 1099-B, you can enter it as received. If the Cost Basis is incorrect, you can indicate that and enter the correct basis.
If she then distributed a portion of the proceeds to others, she can report it as Nominee Income in her return. Then she has adjusted her taxable portion of the 1099-B proceeds.
Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received). You must also furnish a Form 1099 to each of the other owners.
File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)
- On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.
The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:
@gwmorgan1955
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