interest received from a bank,

[ardi600]

In a joint account where the account earns interest in a bank, am I correct to say that one individual could claim the interest income or they could split it in half. for example, an account earned 4000 in interest and individual A and individual B are on the account. A could put the 4000 income on his or her return and B would put none, or they each could split it and put 2000 each. correct?

[oceanlovin'ea]

It would be reported in either A or B's social security number. That is the one that should claim the income. If that individual wants to give half to the other one, then they would do nominee interest to the other person.

Linda, EA

[AJsTax]

options

WE use several options and do this often due to OHio's tax code and benefit to file MFS.
A. 100%on taxpayer with SS # on Form
B. split with half on each. be sure to enter 100% on taxpayer and a line that says amount on spouses return to back it off.
C. All on spouses return. again all on primary and backed out with entry of Reported on spouses return.
This has been done for very many returns for very many years with no problems in this firm.

[Gary2]

In theory, each person's share is determined by local law. Some issues to consider are how much share of the investment was provided by each, and what the intent is.

The social security number on the 1099-INT influences how it's reported (directly or as nominee), but is typically irrelevant for determining how much is reported by each. The person who's SSN is on the 1099-INT must report the full amount, but then must report any nominee interest that legally can only be interpreted as belonging to the other person.

The only thing close to a legal analysis of the ownership that I've seen is the discussion in Pub. 550 for jointly held U. S. Savings Bonds. I assume that's because the ownership of the interest for Savings Bonds is determined by federal law, not state law.