How do I report dividends and interest on Joint accounts that all use his SSN as the tax ID, if we file separate tax returns?

[Mrs--Rog]

My husband and I have a joint brokerage account that reported dividends, interest, and capital gains.  The account is in his SSN for tax purposes. 

If we file separate returns do I report all of this income on his tax return?

Can I simply divide everything in half and report each half on our individual returns?

[IsabellaG]

You can report half on each return, or your husband can report all of this on his.  On your husband's, since it's being reported under his Social Security number, first report the entire amount on his return. For instance,in the case of Interest Income, enter all of the interest, then on the screen Tell us if any of these uncommon situations apply, check I need to adjust the taxable amount. Then enter the amount that you are reporting as a positive amount, and check I received all or part of this interest for someone else (I am a nominee). Do the same thing with Dividend Income. 

There isn't a place to do that for stock sales. You could each report half of the proceeds, and save the information in case the IRS questions your husband (because it's reported as his), or follow this procedure from SuperUser bwa:

https://ttlc.intuit.com/replies/4849085

https://ttlc.intuit.com/replies/6110828

[Pbbarraza]

Same situation except it is between my brother and I.  His SSN is listed on the JT TEN mutual fund but we have ordinary dividends and qualified dividends.  How do you split the qualified dividends $ amount which is less then the ordinary dividends if we plan to report 50% each for the ordinary dividends? thanks

[JohnW152]

To show nominee interest using Turbo Tax, enter the 1099-INT:

• On the Do Any of These Uncommon situations Apply? Screen, select I need to adjust the interest reported on my form
• Continue
• On the Tell Us about Your Interest Adjustment screen, enter the adjustment amount and reasons for adjustment: I received all or part of this interest for someone else (I am a nominee)

Your brother needs to report his share on his own return, as well, if he's required to file a return.

[Pbbarraza]

Thank you Follow-up question:

1) How is are the Qualified Dividend section in Turbo tax affected by this split? 

2) How do we handle Capital Gains or Losses for a Joint tenant account (brother and brother)? Only one person can report Gains or Losses or can both report gains and losses?

Thanks

[MarilynG1]

@Pbbarraza Split your entry of all amounts on your 1099-DIV as agreed upon.  Both parties will then report the same split of Qualified Dividends and both report their share of Gains/Losses based on these entries.

In other words, one party can't enter 100% of Box 1 and the other party 100% of Box 2.  

Click this link for more info on Reporting Dividends. 

[Pbbarraza]

Thanks for your response.  

So for Capital Gain or Loss I have to divide the total amounts for each field from what it says in the 1099s override the 1099 information, if my brother and I are reporting the loss/gain 50/50  on our own separate tax returns? Does that sound right? 

[ThomasM125]

For the investment sale entries, I would suggest you enter the full sale amount and then change the cost basis to reflect your share of the profits on the sale. Otherwise, your sale amount will be less than what the IRS has in their records, so they may adjust your tax return later on and send you an invoice for the difference.

On your spouse's return, she can just report her share of sales and cost basis, as the IRS won't have a record of her sales.

When you enter your sale, you should enter the cost basis reported on the form 1099-B, then use the The cost basis is incorrect or missing on my 1099-B option on that screen to adjust the cost basis.

[Pbbarraza]

So if I am splitting my cost basis 50/50 between my brother and I, do I change in turbo tax the Proceeds (Box 1D) by 50% as well? 

[WendyN2]

Yes, @Pbbarraza, if this is a split 50/50, then you would report both as 50/50. It is handled the same as a sale of a residence. Note that is is always best to add in the "description" line "1/2 of...". 

[Pbbarraza]

@WendyN2 So when I make the cost basis adjustment in turbo tax, I have to do the math myself in the adjustment cost basis.  For example, if the proceeds (1D) are 30K and the cost basis (1E) is $31,000 then I adjust the cost basis 50/50 with my brother since this is a loss.  The total loss for both of us is $1000, so I divide by 2 = $500.  And I adjust in TT the cost basis to $30,500 which allows me to report $500 loss and he will have to do the same.  Did I understand that correctly?  If so there isn't a place in TT to say this was a 50/50 split with my brother. :( 

Thanks

Patricio

[MarilynG1]

Unfortunately, there is no place in TurboTax to indicate investment income split with a joint accountholder.

Your brother will enter the 1099's reported under his SSN, and indicate 'adjustment' to report his amount, under 'Other Uncommon Situations'. 

He will issue you a 1099 as Nominee for your portion, which you report on your return.  You will need to do your own calculations. 

Click this link for more info on Split Investment Income. 

[Pbbarraza]

@MarilynG1 Thank you for sharing so this brings up another question.  My brother has to assign me a new 1099 and he files that with Federal and State?  Is there a way to do this electronically to the Federal and state gov?  or does this have to be done manually?  Sounds like I can't file my taxes via TT until he fills out this form?

thanks

[MarilynG1]

Your brother can prepare a 1099 in TurboTax with the Business CD version or the Self-Employed online version.  Or, he can download forms from the IRS site and give you your copy and send one to the IRS.  

You can enter your share of the 1099-Div in your return using the Payer's name, address, and ID number from his 1099-Div and should still be able to file your return, as long as you have the 1099 form later in your records.

Click this link for more info on Creating Nominee Forms.

This IRS link is for the1099-Div form. 

[Pbbarraza]

Hello again!  follow-up from last year's question on dividend split of 50/50.

1) Do we actually edit the reported numbers in the 1099Div by 50%??? for example box 1A on the 1099D said $2000, 1B is $1000 and Cap gains is $800 so reduce all those numbers by 50% on the turbo tax screen 1099 Div screen? 

2) And then on the next couple of screens, I check mark adjusted dividends by a $ amount of $1000?

is that the right process? 

Thanks