My ex and I had a joint brokerage account, which earned capital gains. We can't file jointly because we're divorced. It's joint income. How do we file this?

[chango_ivy]

My ex-wife and I had a joint brokerage account, which earned us a total of about $3000 in capital gains. We can't file jointly now because we're divorced. The income is for a joint account, so it's both of out income. Does one of us choose to claim it? Do we each claim half of it? Do we have a choice?

[SweetieJean]

Is there anything in your divorce agreement that covers this?

[chango_ivy]

No, this wasn't covered in the divorce agreement.

[bwa]

You would each report one half if you each own a 50% interest in the account.

Whom ever is listed first on the Brokerage firms Form 1099 should send a nominee Form 1099 to the IRS and the other person, The IRS instructions for Forms 1099 include the following:

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.” A spouse is not required to file a nominee return to show amounts owned by the other spouse. The nominee, not the original payer, is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

Nominee forms 1099 are a pain in the neck.  For future years, to avoid them, get that account out of both of your names by dividing it up.

[chango_ivy]

So, just to be clear, is it mandatory for each of us to do 50%, or is it possible choose to have one person file the income?

[bwa]

You should report it based on your ownership interest.  However, if one or the other reports it all and the IRS collects the same amount of tax, I can't see them objecting.  You would have a problem, however, if it is reported by the person not listed first on the Form 1o098.