Question

Joint Investment Account - Who pays taxes?

Forum|Forum|5 years ago
January 24, 2021
2 replies
0 views

Hello everyone, I have a joint investment account with my father. He is the sole contributor to the account and I have never added to the account. Additionally, he does not file taxes and has not for a while. Would I put this on mine or would he be required to file?

TurboTax Deluxe Online

N

npierson777

It depends what type of investment account you and your father have. If you received 1099-DIV,1099-INT,1099-B or any other tax form from the investment company showing your SSN on that, you must include it in your income. In your case you may reduce the income through allocation between you and your father.

H

hessle

In my case, my mother's SSN is on the 1099. My mother claims it as her income. Do my sister and I have to claim anything?

AmyC

In the case that after I add my name to the brokerage account, my parent’s ssn is on the reporting. But the account has capital loss overall, it’s more beneficial for me to claim the loss. How to report that loss on my filing instead?

If you are already on the account, you could ask the brokerage to issue a corrected form with your social security number instead. If not or if they won't, then your father would need to claim it on his tax return since he got the form but then,:

he can subtract it off as nominee income.
you can claim it on your return.
Your father would need to issue a matching form to you.
you can ask the brokerage to switch the reporting number for future years

General Instructions for Certain Information Returns (2023)

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 IRS Submission Processing 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.

Reference: Responsible Parties and Nominees

@name taken

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

M

Mike9241

the person whose SSN is on the reporting forms is going to report 100% then show subtraction of 1/2 or whatever as a nominee. this may cause issues because TT does not like negative numbers on certain forms.