How to allocate 50% of stock sales and gain to divorced couple?

[David]

TPs were divorced during 2015. The 1099-B is in both TP's names but only the H's ssn.

I'm sure the IRS will expect to see the full gain on the H's tax return since the 1099-B only reports his ssn.

Is there a way to report only 50% of the sales, cost and gain for the H? I'm also preparing the ex-wife's tax return so I would report 50% of cap. gain to her as well.

Thanks.

[Abby Normal]

You could add a line on the 8949 for half the proceeds with equal basis for zero gain and call it "50% Proceeds to spouse". That will having to deal with a matching letter on the proceeds. Not sure if IRS is able to match basis yet, but in any event, will be easy to explain to IRS if they do inquire.

On a side note, I hate joint investment accounts!

[DANRVAN]

You could also put in full amount as reported on 1099-B, then on the next line enter as negative 1/2 of the proceeds and as negative 1/2 of basis.

I believe that would resolve any IRS matching issues and client coronary issue that might result from an IRS letter.

[Lion EA]

Were the stocks sold before the divorce?  If not, who received the proceeds?

[jklcpa]

I think this could be handled by entering 100% of the transactions as reported on 1099-B on the husband's returns and then entering code "N" in col f to back out the portion of gain or loss attributable to the ex-wife. Include an explanation to accompany the return that includes a statement of why this was done, the ex-wife's name and SSN, and the amount of gain or loss she is including on her return.

On ex-wife's return, report her share of the #s from the 1099B. She won't have a matching issue so this shouldn't generate an IRS letter. Attach a similar explanation to her return stating that amounts attributable to her were reported on the 1099B to the ex-husband, and be sure to include his name and SSN in that explanation.  

I could live with the suggestion made by Abby Normal and Danrvan also.