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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Splitting investment income among joint owners
Expert: Helen P. O`Planick, EA
Date: 9/3/2008
Subject: Splitting investment income among joint owners
Question
QUESTION: I have several investments where my sister and I are joint owners with right of survivorship. I wanted to know how we go about splitting the taxable events between us (such as the yearly distributions and/or if we sell at a gain or loss)? Can we each choose what % to put on our taxes or does one of us have to claim the entire event? Thank you
ANSWER: One can nominee the other their share of the interest or the one that claims it can ask the sibling to pay their share of the taxes on the amount.
Helen, EA in PA
---------- FOLLOW-UP ----------
QUESTION: Thank you for your quick response. I had a follow-up question to your answer. How do I nominee the other their share of the interest? If both of our names are on the account, can just one of us choose to report the whole amount? If so, does the other need to report anything to the IRS to let them know that the other owner reported the income?
Answer
If you want to do nominee interest, you just put it all on your reurn (Susan) and then take the half that is Mary's (or not, whatever your sister's name is <G>), and put it on the Sch A as Nominee Interest - Mary Smith (123-45-6789) and the amount, subtracting it from the total. Then make sure Mary claims it.
As long as whomever's SSN on the account shows something on their return, and all the income is accounted for, the IRS will be okay with it.
Helen, EA in PA
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