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March 15, 2024
Question

For a 1099-B assigned to the wrong family member tax IDN, how do I input the explanatory information into TurboTax on why it was added to one and removed from the other?

  • March 15, 2024
  • 1 reply
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An investment firm's transition of investment account platforms resulted in an incorrect assignment of tax IDN for one account.

1 reply

CatinaT1
March 20, 2024

I would request a corrected 1099-B from the Investment Firm. There is no way to put an explanatory note on your return and the IRS will be looking for the information to be reported on the return associated with the id number on the form.

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April 4, 2024

The Investment Firm will correct the tax IDN for 2024, but will not retroactively change the 2023 1099-B issued.  

At the heart of the issue is a Trust account where the Trustee's IDN was incorrectly used instead of the Grantor's IDN when a new account was established within the Investment Firm.  Given that, can it be handled through the "I need to adjust the dividends" option within TurboTax?  The guidance language is "You received the dividend as a nominee: You are a nominee if you receive dividend income that actually belongs to someone else (other than your spouse). Remember you must inform both the IRS and the person you received the dividends for of the payer and the amount."  The Dividends and Capital Gains do belong to someone else.  The "Learn More" selection in the "Tell us about your dividend adjustment" indicates "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."  The challenge is the three examples of making changes that reduce the percentage of 1A and 2A combined, but don't eliminate the incorrect dividends and gains.  So, how does one properly adjust each separate income item (Boxes 1A, 1B, 2A, and 5) for the received 1099-DIV?  I can make each entry zero, but how do I attach an explanation statement? 

April 10, 2024

You can't attach a statement for the 1099-B in TurboTax.  You can handle it in one of three ways-

 

If you enter summary totals into TurboTax you can attach the 1099-B and send it to the service as an attachment.

 

You can file the return electronically and print form 8453,  This form allows you to send separate documents.  You can send a copy of the 1099-B with a nominee statement.

 

You can manually change the name of each sale entered from the 1099-B to "Name of stock, sold under nominee EIN XXX-XX-XXXX".  

 

@Tin Man Tom 

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