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zeljt
New Member

We have stock sale proceeds from a joint tenant account. Can either tenant report under their social security number?

The 1099B is recipient's ID is for one of the joint tenants.   Can the other person report it as income for their account?  For example person A is recipient ID on tax form, but person B wants to report as income instead.  Can this work?

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3 Replies
ToddL
New Member

We have stock sale proceeds from a joint tenant account. Can either tenant report under their social security number?

Yes, assuming that "B" receives whatever income he/she wants to report on their return. For example, if "B" has a much lower tax rate than "A", you can't let "B" report the income while "A" keeps it.

Whoever receives the Form 1099-B income, must report the entire Form 1099-B on their own tax return - the IRS has a copy of the 1099-B and will expect to see the proceeds on the named payee's return.

If another person (nominee) actually received any portion of the proceeds, you can note this on your return, as follows:

First Option:

Enter a negative number in Line 21 with the caption, “Distribution to Nominee YYY, SSN xxx-xx-xxxx.”  These are not Wages. The negative number on Line 21 will adjust the income of the reported payee to the correct amount.  The reported payee must issue a Form 1099-B to the nominee payee for nominee’s share of the distribution.  

Enter the negative income adjustment with the following menu path:

  1. Federal Taxes
  2. Wages & Income
  3. Less Common Income
  4. Miscellaneous Income
  5. Start
  6. Other Reportable Income
  7. Start
  8. Other Taxable Income
  9. Description = “Distribution to Nominee YYY, SSN xxx-xx-xxxx”
  10. Amount = -$xxx

(or select "Jump to other reportable income" after entering "other reportable income" in the Search Box of TurboTax online.

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.  You can also e-file using the step below instead.

Second Option:

If the named Payee does not want to issue a Form 1099-B to the nominee, then the nominee can enter it as a substitute Form 1099-B, by choosing that selection when they start the 1099-B interview in "Stock, Mutual Funds, Bonds & Other"

When  signed into your TurboTax account (online or desktop):

1. Use the Search box in the upper right

2. Search for 1099b

3. Jump to 1099b

4. Select "I don't have a 1099-B" and then enter the information as if you received the actual 1099-B.

5. The nominee will enter the named Payee's  information as the "Payer", including SSN as "Payer's ID".

We have stock sale proceeds from a joint tenant account. Can either tenant report under their social security number?

This answer does not appear to deal with the fact that the income (from a stock sale) was in the form of long-term capital gains. 

 

Additional info: both of us are named on the account and both of us received the same 1099-B (as part of a 1099 Composite) and were able to import it into TurboTax directly from the brokerage.

 

Would simply modifying the 1099-B in TurboTax, cutting the shares and dollar amounts in half, work instead?

DaveF1006
Employee Tax Expert

We have stock sale proceeds from a joint tenant account. Can either tenant report under their social security number?

Yes, cut the shares and dollar amounts in 1/2. If the IRS questions you on the reporting of this transaction, be sure to explain to them the details and keep all relevant paperwork relating to the transaction.

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