Income tax. IRS. CD. joint ownership. tax on interest. Which owner pays tax--primary, both, each 1/2?
Question:
Answer:
When a taxpayer receives interest and/or dividend income from savings and/or investment accounts, jointly owned by others, also, and the Form 1099-INT and/or 1099-DIV is issued to him/her, as a "nominee," the taxpayer should -
1) report 100% of the interest and/or dividend amount, reported on the Form 1099, on Form 1040, Schedule B, and
2) deduct the portion attributable to others on a separate line, on Schedule B.
The taxpayer who receives the Form 1099 from the financial institution should, in turn, issue a Form 1099-INT and/or Form 1099-DIV, as appropriate, to the joint owners, for their fair share of the total interest and/or dividend amount.
Phil
http://www.phillipfostercpa.com/tax.html...
both should pay 1/2, but to file you'll need to ask an accountant how to file since there may be special rules involved.
Nominees. Generally, if someone receives interest as a nominee for you, that person will give you a Form 1099-INT showing the interest received on your behalf.
If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on nominee distributions under How To Report Interest Income in chapter 1 of Publication 550, or see the Schedule 1 (Form 1040A) or Schedule B (Form 1040) instructions.
Pub 17
http://www.irs.gov/publications/p17/ch07...
Nominee distributions. If you received a Form 1099-INT that includes an amount you received as a nominee for the real owner, report the full amount shown as interest on the Form 1099-INT on Part I, line 1 of Schedule 1 (Form 1040A) or Schedule B (Form 1040). Then, below a subtotal of all interest income listed, enter “Nominee Distribution” and the amount that actually belongs to someone else. Subtract that amount from the interest income subtotal. Enter the result on line 2 and also on line 8a of Form 1040A or 1040.
Publication 550
http://www.irs.gov/publications/p550/ch0...
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