1099-Misc Royalties that my sibling and I have to split, what do we do?

[vkester]

Parents died, my sibling and I now get a 1099-Misc for Royalties, we do not own the property, know nothing about it, but we get royalty money now for material that gets taken from the property. The company that runs the place only sends one 1099-Misc form, in only one of our names.  We each do our own taxes, and in different states.  How is this reported and expanded in MY taxes?

[DoMyOwnUsually]

Sounds like the royalties 1099 has one SSN (or tax ID#) and that entity/person must file that income. 

If it comes to one of the persons, how you work it out with your sibling is up to you.  If I got the royalty and paid half to my sibling I think I would work out that my sibling pays some tax back to me.

If it comes to a trust or other entity that is not one of the people, then that entity has to account to the IRS for any income and distributions. 

[Critter-3]

If it comes in only one person's SS# then that person should complete the return without that royalty ... make a note of the refund or balance due then  add the royalty and note the change in the refund or balance due ... divide that in 1/2  and that is what the other person owes you for their 1/2 of the income.  This is the simplest way to deal with such a situation. 

[fanfare]

@vkester 

You must have some ownership interest or you would not be paid.

Nominee/middleman returns. 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 must also 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.”

That's the correct way to handle it if you get the amount for both of you.

The allocable amount is one half.

the allocated amount offsets the MISC income on your tax return.

[vkester]

Years ago, when my father passed away, my siblings and I heard from other relative about the complex sales of several properties in the county in California where I live.  The sale was done by my great grandmother, based off the will (our understanding) that her husband left.  The properties were and are ongoing quarry operations, with sand, granite being taken out.  This is where a new very huge construction company now runs these quarries.  Of the research I have attempted to do on my own, I find that the construction company is paying the property taxes.  And what started out as royalties being paid out to the oldest adult of each family, who within each family distributed the monies out to their siblings, and now years and lives later, something that happened when I was just a little kid, have now fallen in my older sister and my lap.  Since she is the oldest.  The huge construction company had continued to deposit into our parents estate bank account quarterly payments, and just this last year my older sister gets this 1099-Misc.  We have no other information, I agree with you telling me that we must have some ownership interest or we would not being getting paid any monies.  But at this point in time it appears to me that my days of doing my own taxes on TurboTax have ended, as this is way past what I can handle or from what I am seeing what Turbo Tax can.  I normally use Turbo Tax Deluxe, as was my sister, and we both get completely different dollar amounts on this when we did and or doing our 2021 taxes.  I show I do not owe her the same amount in taxes that she comes up with.  Some of the answers given to my question sound ok, until I do them on Turbo Tax, and it gets really confusing and messed up.  Some of the answers a simple, and if it were not my sister and I coming up with completely different dollar amount of taxes due, it would work, but getting the different amounts is what is a major issues now between us,  I asked the question as simple as I could, but I guess due to that, that is why some of the answered solutions do not seem to be working.  If this is my last posting, I do thank all of you who have given me the advise of what to do.  I would like to stay with Turbo Tax, and not deal with lawyers or tax people, but having a few years of life left, this will come up each year until I am gone ... and then it gets dumped into my children's laps and it will start all over again.  Somehow I think their is someone at this huge construction company just sitting back laughing .... 

[vkester]

Years ago, when my father passed away, my siblings and I heard from other relative about the complex sales of several properties in the county in California where I live.  The sale was done by my great grandmother, based off the will (our understanding) that her husband left.  The properties were and are ongoing quarry operations, with sand, granite being taken out.  This is where a new very huge construction company now runs these quarries.  Of the research I have attempted to do on my own, I find that the construction company is paying the property taxes.  And what started out as royalties being paid out to the oldest adult of each family, who within each family distributed the monies out to their siblings, and now years and lives later, something that happened when I was just a little kid, have now fallen in my older sister and my lap.  Since she is the oldest.  The huge construction company had continued to deposit into our parents estate bank account quarterly payments, and just this last year my older sister gets this 1099-Misc.  We have no other information, I agree with you telling me that we must have some ownership interest or we would not being getting paid any monies.  But at this point in time it appears to me that my days of doing my own taxes on TurboTax have ended, as this is way past what I can handle or from what I am seeing what Turbo Tax can.  I normally use Turbo Tax Deluxe, as was my sister, and we both get completely different dollar amounts on this when we did and or doing our 2021 taxes.  I show I do not owe her the same amount in taxes that she comes up with.  Some of the answers given to my question sound ok, until I do them on Turbo Tax, and it gets really confusing and messed up.  Some of the answers a simple, and if it were not my sister and I coming up with completely different dollar amount of taxes due, it would work, but getting the different amounts is what is a major issues now between us,  I asked the question as simple as I could, but I guess due to that, that is why some of the answered solutions do not seem to be working.  If this is my last posting, I do thank all of you who have given me the advise of what to do.  I would like to stay with Turbo Tax, and not deal with lawyers or tax people, but having a few years of life left, this will come up each year until I am gone ... and then it gets dumped into my children's laps and it will start all over again.  Somehow I think their is someone at this huge construction company just sitting back laughing .... 

[bcos0106]

to further this discussion:

I receive a 1099-MISC for 8000.00 from entity X

I share these royalties with sibling Y - - i give her half which is 4000.00

When I create a 1099-Misc for her it will be for 4000 with me as payor.

But where is my 1099-misc for 4000 (instead of the 8000 from entity X) to file with my taxes?

How do I not get taxed on 8000 if I don't have a 1099-misc for 4000?

thank you.

B

[Shannon B1]

You will report your income as $8,000 and claim a $4,000 expense for the payment to your sibling. This results in a net income of $4,000 that you'll pay taxes on.

[jaybee84]

To further complicate the problem, what happens if the originating 1099 issuer has withheld federal tax?  Can I issue the 50% income AND the tax withheld to the other person (on a separate 1099) that I am sharing that income with?  

[ThomasM125]

You can't assign withheld tax to a person not listed on the 1099 reporting form. That is so as the tax withheld belongs in the account with the IRS for the individual whose name and social security number is on the reporting form. It will only be refunded or applied that person's income tax.

@jaybee84