How do I record nominee interest/dividends on the 1040 of the person who paid them?

[sbgcpa]

Do I enter the net and then attach a note that explains? I tried entering the original numbers and then reduce those numbers by the nominee portion and the amounts work.  The tax computes right except I get an error message for the qualified dividends.  Please if you point me to another form be very specific.  Apparently there is away to do this since nominee shows up on the summary but I am totally missing it. 

[itonewbie · Accepted solution]

You should always report the gross amount reported on the 1099.  Most software should have a line for nominee interest/dividends on the same input screen(s) used to enter interest/dividends.  Since I don't use PS, I can't be more specific than that.

In case there is no line entry for that (which would be unusual), you can always enter nominee interest/dividend as a negative amount with "Nominee Interest" or "Nominee Dividend" as the description.  Essentially, that separate line entry would offset the gross amounts reported on the 1099s (which the IRS can match) and the net amount is the taxable income.

Others who use PS may stop by to give you more specific instructions for the input.

[Accountant-Man]

Double Click on an interest entry line or dividend entry line to get to the Additional Info Worksheet for either of those two. There's an entry box for Nominee.

Beware if you have capital gain distributions, too. The nominee amount must include that amount, too.

[mark84]

Itonewbie:

I would be interested in consulting with you for a fee regarding nominee accounting. How may I reach you.

Thank you