I share an account that creates income with another person. That account has only my name on it so the 1099 fully comes to me. I regularly send half the earnings to the other person throughout the year. I know I need to give that person a 1099 for the half I give them. How do I categorize that? Would that be considered an expense to me and income to them? And if it is an expense then I'm not sure what kind of expense this would be considered.
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What kind of income? Interest, Dividends, sales, etc.
Sales so all sales monies came to me as a direct deposit then I transferred half of that income as it came in to the other person
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).
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:
https://www.irs.gov/pub/irs-prior/f1096--2022.pdf 1096
https://www.irs.gov/pub/irs-pdf/f1099div.pdf 1099-div
https://www.irs.gov/pub/irs-prior/f1099int--2022.pdf 1099-int
the big issue is 1099-B since there is no standard IRS1099-B that you can use to report all trades
it seems one trade per 1099-B
you also have an issue in that you are supposed to file the red copies with the IRS. they are late - due 1/31/2023. so you could be penalized by the IRS. failure to file can also result in penalties.
Mike but am I considered a nominee if half of the account is legitimately mine and half of the account is legitimately that other person’s? Would I not just accept the entire income from the 1099 but give that other person a 1099 for half of the amount and be done with it or is that just not the right way to go about that?
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