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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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Sorry...but I am still hung up a bit with this situation. I

Resolved Question:

Sorry...but I am still hung up a bit with this situation. I understand your instructions to do a "nominee' distribution from the spouse to whom 1009-Rs and 1099-DIVs were issued. BUT, since the taxpayers are now ex-spouses, do I really have to have the primary taxpayer ISSUE a 1096, etc.? Also, my software doesn't permit the nominee election for Schedule D transactions - the IRS says ONLY to include the taxpayer's sales and basis amounts and then NOTE the other half - will this be sufficient with computer matching not finding the TOTAL amount on the primary taxpayer's return?? Help?
Submitted: 6 years ago.
Category: Tax
Expert:  MequonCPA replied 6 years ago.

Hi and welcome to JustAnswer:


No 1099's or 1096's are issued.


I make an entry on Schedule B "Nominee TO XXX-XX-XXXX" with a negative amount. On the recipient's return "Nominee FROM YYY-YY-YYYY" and a positive amount.


You can be assured of receiving correspondence if you don't report the full sales proceeds from a 1099-B.


You can accommodate the negatives on the Schedule D if you are unable to show negative proceeds and cost, by showing no sales price and net basis to offset gain and sales price and no basis to offset loss. Again using the nominee descriptions.


I know that certain area's in the software won't accept negative numbers. Much of this can be accommodated in the Other Income section where negative amounts should be allowed.


Certainly you can paper file and attach schedules if needed.

Customer: replied 6 years ago.

Thanks for clarifying that I do NOT need to have primary taxpayer issue 1099's and 1096's to his ex-spouse. I will show the "nominee from" and "to" problem. Done with the INTs and DIVs.


I must be stupid! but I am not totally clear on the stock sales.... example:


Sales Basis Gain / Loss

27,500 * 7,500 20,000 * the $27,500 matches 1099-B

0 10,000 (10,000)

$10,000 Total gain to taxpayer (which is HALF of total gain actually realized by the transaction reported)


Spouse: ?? She also had $10,000 gain and had basis of $7,500







Expert:  MequonCPA replied 6 years ago.
Nominee from YYY-YY-YYYY Proceeds 13,750 cost 3,750. No problem because there will be no direct matching.
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