Sale of inherited stock

[Bob Hoffman]

Hi, everyone.

I am confused about the proper way to handle (report) the following situation:

My client was among three siblings who inherited a brokerage account that included stock. I know the proper valuation of the stock issues as they were sold several months later (in 2007) for a loss. The problem is that my client went and registered the account in all three names as a joint account but used her ss#.

Well, the broker has reported all of the proceeds to her and she (and I) wonder how to get the proper information to her siblings. It seems that they should all get the proportionate loss.

Any thoughts would be appreciated.

[Margaret CPA in OH]

I just completed a similar situation. I prepared nominee 1099INT and 1099DIV for the amounts that went to the siblings. Then when entering the divs, etc. on client's return, input the amount nominee'd out with that code.

[zeke]

"as they were sold several months later (in 2007)"

This would indicate that TP rec'd 1099-B reporting sales, not just int & div.

[Maribeth]

I would keep it simple. Report the total sales price on the Schedule D; determine the basis needed in order to give your client 1/3 of the loss. Prepare a schedule for your client to give to her siblings that shows their 1/3 interest in each of the stock sales for them to use on their tax returns.

Maribeth

[Bob Hoffman]

I would keep it simple. Report the total sales price on the Schedule D; determine the basis needed in order to give your client 1/3 of the loss. Prepare a schedule for your client to give to her siblings that shows their 1/3 interest in each of the stock sales for them to use on their tax returns.

Maribeth

My client received only a 1099-B to report the sales. Are you suggesting that no official reporting be made to the siblings? Is there such a thing as a 1099-B nominee forms?

[Maribeth]

My client received only a 1099-B to report the sales. Are you suggesting that no official reporting be made to the siblings? Is there such a thing as a 1099-B nominee forms?

As to a 1099B nominee form, I have no idea if there is one. Does your client have to "officially" report to her siblings? I don't think so. Report the income appropriately on her return. Something as easy as listing the total sales price, total basis and total loss on one line. Then indicating on the next line "less loss attributable to SSN & SSN" would suffice. Then make sure that the siblings have the correct information to report on their returns.

Maribeth