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Nominee Distribution re: Form 1099-DIV

Forum|Forum|3 years ago
March 8, 2023
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I need to do a nominee distribution adjustment for a 1099-DIV. I entered the data per the 1099-DIV which includes ordinary dividends, qualified dividends, capital gain distributions, non-dividend distributions and section 199A dividends. I then follow the step-by-step instructions in TurboTax Deluxe to make the nominee adjustment, but there is no way to adjust the other items on the 1099-DIV. In addition, the amount for qualified dividends on the return is not the same as I entered from the 1099-DIV. I have read many posts, but most are from several years ago. Is there any way to adjust all the elements on the 1099-DIV for a nominee adjustment and be compliant with the way the IRS instructs?

Best answer by Anonymous_

How TurboTax Uses Your Dividend Adjustment Amount

TurboTax assumes you want to adjust the total income from dividends and capital gain distributions reported on your 1099-DIV by the dividend adjustment amount you enter. If that is NOT how you want to handle this adjustment, select Back, adjust the amount of each separate income item, and uncheck the adjustment choice. Be sure to attach a statement to your return explaining each adjusted amount.

Examples:

-You entered $1,000 of ordinary dividends (box 1a), $1,000 of qualified dividends (box 1b), and an adjustment amount of $100. Both ordinary dividends and qualified dividends will be reduced by $100 to $900.

- You entered $1,000 of ordinary dividends (box 1a), $800 of qualified dividends (box 1b), and an adjustment amount of $100. Ordinary dividends will be reduced by $100 to $900. Qualified dividends will be reduced by $80 ($800/$1,000 x $100) to $720.

-You entered $1,000 of ordinary dividends (box 1a), $1,000 of qualified dividends (box 1b), $500 of capital gain distributions (box 2a), and an adjustment amount of $100. TurboTax will add together the $1,000 of ordinary dividends and $500 of capital gain distributions to determine the total amount of income ($1,500) to adjust. Both ordinary dividends and qualified dividends will be reduced by $67 ($1,000/$1,500 x $100) to $933. Capital gain distributions will be reduced by $33 ($500/$1,500 x $100) to $467.

- You entered $1,000 of ordinary dividends (box 1a), $800 of qualified dividends (box 1b), $500 of capital gain distributions (box 2a), and an adjustment amount of $100. TurboTax will add together the $1,000 of ordinary dividends and $500 of capital gain distributions to determine the total amount of income ($1,500) to adjust. Ordinary dividends will be reduced by $67 ($1,000/$1,500 x $100) to $933. Qualified dividends will be reduced by $53 ($800/$1,500 x $100) to $747. Capital gain distributions will reduced by $33 ($500/$1,500 x $10) to $467.

A

Anonymous_Answer

Employee

How TurboTax Uses Your Dividend Adjustment Amount

TurboTax assumes you want to adjust the total income from dividends and capital gain distributions reported on your 1099-DIV by the dividend adjustment amount you enter. If that is NOT how you want to handle this adjustment, select Back, adjust the amount of each separate income item, and uncheck the adjustment choice. Be sure to attach a statement to your return explaining each adjusted amount.

Examples:

-You entered $1,000 of ordinary dividends (box 1a), $1,000 of qualified dividends (box 1b), and an adjustment amount of $100. Both ordinary dividends and qualified dividends will be reduced by $100 to $900.

- You entered $1,000 of ordinary dividends (box 1a), $800 of qualified dividends (box 1b), and an adjustment amount of $100. Ordinary dividends will be reduced by $100 to $900. Qualified dividends will be reduced by $80 ($800/$1,000 x $100) to $720.

-You entered $1,000 of ordinary dividends (box 1a), $1,000 of qualified dividends (box 1b), $500 of capital gain distributions (box 2a), and an adjustment amount of $100. TurboTax will add together the $1,000 of ordinary dividends and $500 of capital gain distributions to determine the total amount of income ($1,500) to adjust. Both ordinary dividends and qualified dividends will be reduced by $67 ($1,000/$1,500 x $100) to $933. Capital gain distributions will be reduced by $33 ($500/$1,500 x $100) to $467.

- You entered $1,000 of ordinary dividends (box 1a), $800 of qualified dividends (box 1b), $500 of capital gain distributions (box 2a), and an adjustment amount of $100. TurboTax will add together the $1,000 of ordinary dividends and $500 of capital gain distributions to determine the total amount of income ($1,500) to adjust. Ordinary dividends will be reduced by $67 ($1,000/$1,500 x $100) to $933. Qualified dividends will be reduced by $53 ($800/$1,500 x $100) to $747. Capital gain distributions will reduced by $33 ($500/$1,500 x $10) to $467.

A

Anonymous_

Employee

Note that if you want to adjust the figures on your 1099-DIV manually, you can usually accomplish that using Forms Mode (desktop only).

The nondividend distributions are different in the sense that they generally only serve to reduce basis in the security.

R

RandyTaxAuthor

Thanks for the quick reply. Since the manner in which TurboTax applies the nominee distribution adjustment to ordinary dividends to qualified dividends and capital gain distributions is different from what actually occurred, it looks like the best way if for me to enter the actual numbers and attach a schedule as you suggested.

I noticed that I could right click on each number in the 1099-DIV input screen and click on "Add Supporting Details." Here i could enter a line for the amount on the 1099-DIV from the broker and then put in a line named "Nominee Distribution" for each adjustment amount which resulted in the actual net number I need for each line item. In addition, TurboTax produced a schedule titled "Additional Information from 2022 Federal Tax Return" showing the details for each line item that would be great to attach to the return to show the IRS how the numbers went from the 1099-DIV to the numbers on the return. My question is can I attach this schedule to the return to e-file or will I be forced to mail a paper return?