Do we just split the interest and dividends fifty-fifty for the tax purposes?
Well, as far as the IRS is concerned, whoever has their social security number on the account should be the one who claims the income. As far as I see it, you could handle the tax situation one of two ways: 1) let the person in the lower tax bracket be the individual whose social security number is on the account, let that person pay the tax, and the other individual should reimburse that person for half of the tax paid by the person who reported the income or 2) if you want to be totally legal, you could have the person whose social security number is on the 1099 pick up all of the income on his/her tax return, then subract half as "nominee distribution" and have the nominee show his/her half of the income on his/her tax return. Personally, I'd go for the first option.
Source(s):
CPA with 20 years in tax
If you are joint tenants you should have some kind of agreement as to the % interest each f you has in it. In the absence of such an agreement I would think that you should split the income 50/50
|
