Form 1099-B - Nominees

**The information below has not been verified for the 2020 tax year as the IRS Pub. 550 has not yet been released by the IRS.**

The following will assist with the entry of Form 1099-B Proceeds From Broker and Barter Exchange Transactions when the income belongs to someone else.

Per IRS Publication 550 Investment Income and Expenses (Including Capital Gains and Losses), on page 66:

Nominees. If you sell a block of stock or other property that you bought at various times, report the short-term gain or loss from the sale on one row in Part I of Form 8949 and the long-term gain or loss on one row in Part II of Form 8949. Enter "Various" in column (b) for the "Date acquired."

File Form 1099-B or Form 1099-S with the IRS. If you received gross proceeds as a nominee in 2019, you must file a Form 1099-B or Form 1099-S for those proceeds with the IRS. Send the Form 1099-B or Form 1099-S with a Form 1096 to your Internal Revenue Service Center by February 28, 2020 (March 31, 2020, if you file Form 1099-B or Form 1099-S electronically). Give the actual owner of the proceeds Copy B of the Form 1099-B or Form 1099-S by February 18, 2020. On Form 1099-B, you should be listed as the "Payer." The actual owner should be listed as the "Recipient." On Form 1099-S, you should be listed as the "Filer." The actual owner should be listed as the "Transferor." You do not have to file a Form 1099-B or Form 1099-S to show proceeds for your spouse. For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns.

Note. The entry of your nominee income is automatically handled by the TaxAct program if "Code N" is selected as the adjustment code when entering the Form 1099-B in the program.

This would only need to be done on the taxpayer's return to which the Form 1099-B was issued (i.e. the person whose social security number was listed on the form issued by the financial institution). The other taxpayers' return(s) would include the amount from the Form 1099-B issued by you to them as outlined below.

TIP: If you received income as a nominee, you must give the actual owner a Form 1099-B unless the owner is your spouse. You must also file a Form 1096 Annual Summary and Transmittal of U.S. Information Returns and a Form 1099-B with the IRS. For more details, see the General Instructions for Certain Information Returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) and the Instructions for Forms 1099-B.

Note. The IRS uses this process to receive ownership information that helps determine which return will contain the income.

To enter or review information from Form 1099-B:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, click Gain or loss on the sale of investments to expand, then click Capital gain or loss (Form 1099-B).
  3. Click + Add Form 1099-B to create a new copy of the form or click Edit to review a form already created.
  4. Continue with the interview process to enter all of the appropriate information.
  5. On the screen titled Investment Sales - Adjustment Code(s), select "N - Received Form 1099-B as a nominee" from the Other adjustment code drop-down, then click Continue.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.