AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner practitioner and have performed fee only investment management and financial planning services for the past 11 years.
Expert: John D Smith, CFP Date: 1/28/2008 Subject: mutual fund redemption
Question I am the nominee for a mutual fund equally owned by 3 people. I have always reported all 1099-DIV amounts on my tax return, an agreement the three of us made when we set up the fund. Further we agreed that any 1099-B transactions would be reported under the individuals tax return when he/she wanted to redeem his/her share. In 2007, one of the owners redeemed his entire 1/3 share of the mutual fund, a long-term capital gain. I received a 1099-B for this transaction. How do we report this redemption on his tax return an not mine?
Thank you
Answer The tax transaction needs to be reported on whoever's tax return matches up with the social security number associated with the 1099. If this is not done it will more than likley trigger with the IRS and a notice will be sent for tax due on this amount. It is probably best to report this transaction on your return and have the other investor repay you the amt you paid in taxes. I hope this helps.
