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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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THREE RELATED INDIVIDUALS OPEN AN ACCOUNT WITH AN INSTITUTION

Resolved Question:

THREE RELATED INDIVIDUALS OPEN AN ACCOUNT WITH
AN INSTITUTION LIKE SCHWAB OR FIDELITY. THE ACCOUNT
IS LIKE A BANK ACCOUNT (PAYING A VERY SMALL AMOUNT
OF INTEREST) BUT YOU CAN MAKE MORE MONEY BY TRADING
STOCKS, BONDS, MUTUAL FUNDS, ETC.
AT THE END OF THE YEAR, WE HAVE A TAXABLE EVENT TO
REPORT TO THE IRS. WHO IN THE ACCOUNT PAYS THE TAX?
IS IT JUST ONE PERSON OR ALL THREE IN THE ACCOUNT OR
CAN WE CHOOSE THE PERSON WHO WOULD HAVE TO PAY THE LEAST
TAX BASED ON THEIR PARTICULAR TAX SITUATION?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
HelloCustomer

You cannot simply choose the person who you wish to report the income and pay the tax.

Even though you may have set up an account that has multiple account owners, the financial institution still requires that only one person be named as the primary owner of the account. That person would have been identified when you initially set up the account.

At the end of the year, the financial institution will send 1099 forms to report any income you had from this account. The 1099 form will be sent to that primary account owner under his name and social security number, and he or she is the one who must report the income from this account.

If you are not sure who you set up as the primary account holder, you can contact the financial institution for that information.

If this was helpful please press the Accept button.

Thank youCustomer

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