Who pays the tax?

[TaxTime829]

1. Mother bought stock but put stock certificates in her & daughters name.
2. Mother sells stock and gets 1099-B with her SS number on it.

Questions:
1. Is the income split between the mother and daughter because they both owned the stock jointly?
2. If the income is split... how do I file the tax return since the IRS will see all the income in the mothers name only?

[Koss]

Form 1099-B

Mother bought stock but put stock certificates in her & daughters name.

You mean real paper stock certificates, like, from the 20th century?

Mother sells stock and gets 1099-B with her SS number on it.

Do both names appear on the Form 1099-B?

This matters, even if the form only has one social security number.

If she was holding paper stock certificates, then she had to turn them over to a broker in order to sell the stock. If the certificates had both names, then either the broker had to put the stock into a joint account, with both names on the account, or...

Or the daughter had to sign over her interest in the stock to the mother, which would have allowed the mother to "deposit" the stock into a brokerage account that had only her name on it.

This isn't really that complicated, but we need to know exactly what happened...

BMK

[Burke]

Yes it should be split between the mother and daughter if they were joint owners. (Not POD or TOD which indicates a residual interest on death of the mother.) You can handle it by adjusting the Sche D information on the mother's return.

[TaxTime829]

Paper certificates... Client gave me copies... they have the names of mother and daughter on them with "JT".

The company was purchased by another company. During the process the common stock was bought back by the new company.

[TaxTime829]

How do I adjust the mothers return to show she received half of the 1099-B has the mothers SS number on it?
If so... the daughters return should be adjusted as well... showing half of the sale... but their is no 1099-B for her at all???

I just don't know how to adjust the tax return(s) so all this doesn't generate an audit for the client(s).

[Koss]

Form 8949

On the mother's return, part of the sale can be reported as a nominee distribution. Report the entire sales proceeds, but make an adjustment to the basis in column (g) of Form 8949, so that the net gain or loss reported by the mother is only her half. The adjustment code is N.

On the daughter's return, report only the daughter's share of the transaction. Report half the basis and half the proceeds. Check box C to indicate that it is a sale for which the taxpayer did not receive Form 1099-B.

BMK

[TaxTime829]

I understand now...Thank you for your help...
Its great that experienced people like you are on this site and are willing to help others... tks again.

[TaxTime829]

I sent you a private message...