inherited and liquidated brokerage fund

Forum|Forum|1 year ago
February 28, 2025
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My brother and I inherited a brokerage fund (not IRA) when my father passed away. We each received half the fund and both liquidated it. We only received one 1099-B form addressed to both of us, that shows the total amount liquidated. How do we handle our personal tax reporting, since both of us are responsible for one=half of the capital gains?

Not A Product Question

DianeW777

Yes, you will each report half. You can send the appropriate amount to the brother whose social security number was not on the 1099-B. Use the procedure below and each of you should report only your half. More forms are included should you need other types of income from the brokerage account.

Nominee Returns. This is how the IRS knows what you are doing and where they should look for the income.

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received). You must also furnish a Form 1099 to each of the other owners.

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

On each new Form 1099, list yourself (the one whose name it came in) as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:

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