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Joint Tenant to Individual Brokerage (Spouse Only)

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    Joint Tenant to Individual Brokerage (Spouse Only)

    This might be considered a double post because I asked the question inside another thread.
    However, I think I should have created an entirely new thread since this is a different matter.

    Client and his wife own several stocks and couple of MLP's in a brokerage account as joint tenants.
    They decide to set up a separate brokerage account in the wife's name only, and they transfer some of the stocks and MLP's into the wife's account.
    This change is not due to a divorce, death, or other life event.

    Has a sale transaction taken place? Gift? No change?

    I ask this because the broker did not report the transaction on 1099B, even though the K-1's from the Joint Tenant MLP's were marked "Final", and separate K-1's were issued for the wife, but the basis showing on the new individual account is the same as the basis showing on the JT account. (Am I making any sense here?)
    "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

    #2
    It is treated as a marital gift, which is unlimited. It would not be a sale, nor would a 1099-B be issued. And, yes, the basis would be the same assuming the assets were purchased in joint names to begin with. (Spouse takes donor's basis.)
    Last edited by Burke; 09-24-2014, 02:48 PM.

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      #3
      I agree with Burke. This is a marital gift or possibly just a marital division of assets for some reason. Either way, no tax reporting on Form 1040 or Form 709.

      Basis in the new account is carried over (the same) from the other account.

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        #4
        Thank you both for the replies and for direction on where to look.
        I appreciate your taking interest in this, and I can give some good news to the client.
        "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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