How do I report a nominee on a 1099-R form from cashing out an insurance policy? The insurance co reported the entire taxable amount under my social

[MarilynG1]

@MidlandBob If you received a 1099-R with your SSN and part of that income belongs to another nominee, click this link to make the income adjustment on your return.  

The other nominee can report the income on their return as 'Other Income'. Click this link for info on How to Report Other Income. 

Keep good documentation of how the funds were actually distributed. 

[MidlandBob]

When I fill out the 1099-R to the Nominees, who's info goes in the "PAYER" name, etc.   The original sender of the funds (which seems crime for me to report using someone elses TIN) or My name/TIN??  And why is it so hard to get IRS on line 1096 form!

[SamS1]

Since you are the recipient of the 1099R and it is reported in your SSN, you need to include the enter amount then make the negative income adjustment described above.  You cannot issue 1099Rs in the name of the Insurance Company.  I would recommend sending a statement to the other parties indicating they need to include $X.XX income from the policy in Miscellaneous income for 2020.  That leaves the reporting responsibility up to the other parties.  If you report the income then do the negative adjustment in the Miscellaneous income, your return will reflect your share.  By notifying the others in writing of their share, you have fulfilled your responsibility notifying them of the income that needs reported on their individual returns.

The pandemic has affected your taxes in many ways. Including reporting in TurboTax the amount of stimulus money you received. Click Here for more information on how the Pandemic affected your 2020  taxes.

[MidlandBob]

What happened to sending a 1096 to the IRS???  And I've requested one from IRS, there must be something really difficult that IRS can't post a scannable form for 1096 on internet....   Thanks for telling me what I assumed that I can't file 1099 using original payee when send 1099-R to Nominees, but would it be fair to say that I use my SSN / Name as Payer on the 1099-R that I issue to the Nominees (seems to read that way)

[SamS1]

The form 1096 is the Informational return transmittal and is Red.  It is a machine readable form.  If you decide to go that route, you will need to complete a 1099R for each participant.  You will need to send the Red A copy from each 1099R you complete with the Red 1096 transmittal and mail to the IRS by 2/28.  These also need to typed so they are machine readable.  Since you are the issuer of the 1099Rs, Yes you would use your name and SSN.

[MidlandBob]

SamS1 - is there another IRS acceptable Route?  Cuz waiting on IRS to send RED copy "A" of 1099-R and 1096 seems pretty polluted.   Help!   

[MidlandBob]

What's the difference between sending Nominee a 1099-R or 1099-MISC???

[Irene2805]

Champ Hal_Al has an excellent explanation of what to do in his answer to another question posted in Community [Solved: What is a nominee adjustment? - TurboTax]

Q. Can 1099-R income be adjusted to reflect  an IRA plan administrator  mistake and sending an RMD to the wrong heir / beneficiary of an inherited IRA?

A.  No. The administrator should issue corrected 1099-Rs. But more accurately, probably not.  It depends on the details of what happened.  A nominee adjustment for a 1099-DIV or 1099-Int is shown on Schedule B. There is no place on the IRS forms foe adjusting a 1099-R. 

If you receive this as the result of an inheritance, and decided to share with others;  you are actually making them a gift, which is not taxable to them, nor deductible (adjustable) by you.

________________________________________________________________________

Generally, if you receive a Form 1099 for amounts that actually belong to another person, you are considered 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. You also must furnish a Form 1099 to each of the other owners. File the new Form 1099 with Form 1096 with the Internal Revenue Service Center for your area. On each new Form 1099, list yourself as the "payer" and the other owner as the "recipient." On Form 1096, list yourself as the "Filer." A spouse is not required to file a nominee return to show amounts owned by the other spouse. The nominee, not the original payer, is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

https://www.irs.gov/instructions/i1099gi

I think you misunderstood SamS1. YOU prepare the 1099-R, along with the 1096 transmittal form and send it to the IRS.  At the same time, YOU send the 1099-R to the recipient.  You can download and print the forms from the IRS website:  

• Form 1096
• Instructions for Form 1096
• Form 1099-R
• Instructions for Form 1099-R

@MidlandBob

[MidlandBob]

Champ Hal_Al has an excellent explanation - No, his explanation deals with INT/DIV while I'm working the cash distribution (R or MISC form).      Not understanding difference between issuing Nominees a MISC or R form?

[Irene2805]

You, the nominee, have to issue to the other person the same type of form you received.  If you received a 1099-R, for retirement plan distributions, then you have to issue a 1099-R to the other person(s) involved.

File Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from profit-sharing or retirement plans, any individual retirement arrangements (IRAs), annuities, pensions, insurance contracts, survivor income benefit plans, permanent and total disability payments under life insurance contracts, charitable gift annuities, etc.

You would file a Form 1099-MISC for each person to whom you have paid during the year:

• At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
• At least $600 in:
  • Rents.
  • Prizes and awards.
  • Other income payments.
  • Medical and health care payments.
  • Crop insurance proceeds.
  • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
  • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
  • Payments to an attorney.
  • Any fishing boat proceeds

@MidlandBob

[MidlandBob]

For 2020, is the IRS allowing BLACK or non-RED copy of the 1099-R to be filed ??  This is for reporting to the IRS, when the single beneficiary distributed funds to other family members.  (don't go there about that being a Gift, it's not in this case, stick with the question, please)

[DianeW777]

The nominee action is normal in your situation.  The red copy should go to the IRS, but they won't turn it away if you send a black copy. 

There are steps here for you to review if you choose.

Nominee returns. 

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: 

• Form 1096-Transmittal 
• Form 1099R 2020

[lee279]

I received a 1099R made out to my grandmothers trust the money was split between myself and my brother I kept the taxes in a separate account. Can I file the whole 1099R on my personal tax return or do I have to send a 1099 to my brother?

[Irene2805]

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:

1. Click on Federal > Wages & Income   
2. 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. 
3. On the Any Other Taxable Income? screen, click the Yes box.
4. Add your brother's amount as a negative number and put nominee adjustment as the description on the next screen, Other Taxable Income.
5. 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:

• Form 1099-R
• Instructions for 1099-R
• Form 1096
• Instructions for Form1096

@lee279

[MidlandBob]

I've been unable to get RED 1096 form from IRS - so far.  two orders, both came without the 1096.   so if I print 1096 out in RED using web page (which clearly states I may get penalty for doing so) or risk going longer to file 1096 and see if IRS will send such.   Got several 1099R forms via US Mail, no problem there.