How do I adjust nominee dividends?

[susanhardin22]

NOMINEE DIVIDENDS - How do I figure the adjusted amount for ordinary dividends of $143 qualified dividends of $138 and capital gain distributions of $942 that I received in my name with my daughter as the nominee?

[MichaelDC · Accepted solution]

After entering the full amount on your return, follow these steps:

• After you click Continue when you have finished entering the information from your Form 1099-DIV, the next screen is titled “Tell us if any of these uncommon situation apply to you” 
• The second choice on this screen is “I need to adjust these dividends” 
• Check this box and click Continue
• Then you will see a screen titled “Tell us about your dividend adjustment”
• Enter the amount as a positive number and the reason for the adjustment.  This will make the proper entry on your Schedule B.

If all of the dividends belong to your daughter, you would enter each of the $143, $138 and $942 as mentioned in your question.

Please feel free to post any additional details or questions in the comment section.

[garys_lucyl]

I am trying to do the same adjustments for a decedents tax return.  The adjustment only asks for one number and it is applied to ordinary dividends.  However, the entire amount I entered is not being used as the nominee distribution amount.  A portion of it has been applied to the "capital gains distribution" on the 1099-DIV and I cannot find any way to undo that calculation. Why are part of the dividends being applied as a nominee distribution of capital gains? In my case, all the capital gains distributions were received prior to death so should be on the decedents tax return.

[katie-algeo]

In this example, how does the daughter report her amount of dividends on her 1040? Specifically, what does she list as the payer (the received from box on the 1040) -- the corporation that send the dividends to her father? Or her father?

Also, there seems to be no way at the moment for the example father to send the required 1099-DIV to the IRS to report the daughter's share of the dividends. The General Instructions publication specifically says that the online 1099-DIV copy A form (which is red, not black) is not scannable, so cannot be printed and mailed to the IRS; in fact, there is a penalty for doing so. There is a way of ordering the forms from the IRS, but that takes 45 days & the national distribution center is currently closed (presumably because of coronavirus). There is a way of electronically submitting the forms, but one has to apply for permission to do that, and that method does not seem intended for a one-time filer of these forms. The toll-free IRS help line has an automated message indicates that live voice help is not currently available (presumably because of coronavirus). As far as I can tell, there is no way, currently, of complying with reporting requirements. Perhaps I misunderstood? Perhaps the father is not required to send the IRS a 1099-DIV for his daughter's share?