joint tenant brokerage account, who gets to file the 1099?

[cmoy]

We (my son and I) got assigned assets thru probate, so a joint account was opened up, with me as the primary account holder.  As such, my understanding is that the brokerage account would notify the IRS of taxes, using my social security number.  In the past, I filed the taxes on the 1099-x statements, but now that the kid is of adult age with a job, I wanted him to file the taxes, since the assets really belongs to him and not me, from a intent standpoint, all legal issues aside.  Can I pick and choose who gets to file the 1099-x, i.e. can he be the one filing the 1099-x statements instead of me?  Just wondering if this will cause a problem with the IRS.

[ColeenD3]

If your social security number is on the form, it belongs to you. However, you can make an nominee adjustment.

In TurboTax you do this by entering the 099-INT, then checking on the next screen that you need to adjust the amount.  You'll then be able to enter the adjustment amount and check the reason for the adjustment.

[cmoy]

thanks!  But the nominee question only asks me about the amount of dividends.  What about the capital gains portion and non-dividend distributions?  How would I pass those on to my kid?

[MarilynG1]

You will have to adjust the Cost Basis to report only your share on your return, with your son as the other account holder.

Increase your cost basis to reduce your capital gain or lower your cost basis to reduce a capital loss.

Click this link for detailed info about Nominee Adjustments for Capital Gains.

[cmoy]

so using the TurboTax Premier desktop product, I have put in the adjustment for the dividend and capital gains distributions for all of our joint brokerage accounts.  On his tax form, I believe that he has now imported in each of those brokerage account information.

It seems to me though that there should be some document that should tell the IRS that me, as the nominee, has now transferred over the dividend info to my son.  I see the 1099-DIV worksheet for each brokerage account that I said the nominee distribution to.  In the Additional Payer and Recipient information, there is an Additional Payer and Recipient Information section at the bottom.  Is the Payer TIN supposed to be the original payer (eg. Charles Schwab), or is that where I put my information, as the nominee?   However, I might be barking up the wrong tree.  I guess I'm looking for a sheet that connects my SSN, the nominee, to his SSN, the recipient.  Is there a sheet like that that I need to provide.  Or else, how would the IRS know the connection?

TL;DR - 2 questions, 1) need to know what to put as the Additional Payer info at the bottom of the 1099-DIV worksheet for those 1099-DIVs that I am adjusting as a nominee, and 2) is there a separate document where I am supposed to tell the IRS who I am assigning the 1099-DIV to?

[DianeW777]

Your questions are answered here and some additional information that you may find helpful.

In the Additional Payer and Recipient information, there is an Additional Payer and Recipient Information section at the bottom.  Is the Payer TIN supposed to be the original payer (eg. Charles Schwab), or is that where I put my information, as the nominee?

• You should be the Payer if you are moving (nominee) the money to your  child. 

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 1099-B
• Form 1099-DIV
• Form 1099-INT

[cmoy]

thanks! 

I guess since this is a TurboTax forum, how does TurboTax take care of all of this?  The very very very last thing I want to do is to mail out anything to the IRS.   A lot of what you mention I've already seen in the IRS publications, but I guess I'm trying to find out how to do this from a TurboTax Premier standpoint.  There is scant little information on Form 1096, it's not a form generated on my tax return within TurboTax, and asking for help within TurboTax yields nothing.  Do I need to upgrade the software?  Wait for a fix?

[RobertB4444]

@cmoy  The IRS doesn't have a lot set up for nominee recipients.  It's not their favorite thing.  So you are right that it is difficult to do this.  It's difficult for reasons.

The two best options for dealing with this are -

1. As @DianeW777 says above you can issue a 1099 to your son.  This is a whole different TurboTax program but it will help you create a 1099 from you for him for half of the proceeds on your original return.  This is the IRS's preferred method and what they would advise you to do over the phone.  

If you choose this one here is the TurboTax program for creating 1099s.

2. Paper file the return with an explanation.  If you include copies of the form(s) and your son's social security number listed as the recipient of half of the proceeds that should solve the issue.

Having said all that what I would do is exactly what you're doing.  File the return with half on yours and half on his and be ready - in case a letter from the IRS arrives - to send copies of both of your schedules B and D and the 1099 to the service.