Can I Use a Nominee Recipient for Individual Brokerage Account 1099 Tax Forms?

This is actually a good question about nominee situations, but I need to clarify some important distinctions here. A nominee is someone who acts as a custodian or agent, receiving income on behalf of the actual owner. This isn't a "loophole" - it's a specific reporting requirement when someone receives income that actually belongs to someone else. If you're the actual owner of the brokerage account and the investments in it, you can't simply designate someone else as the nominee recipient to shift your tax burden. The nominee concept works in the opposite direction - if someone else receives income that actually belongs to YOU, they would file a nominee 1099 to show they're passing that income to you. For what you're describing, the IRS would consider this income assignment, which generally doesn't work for tax purposes. There's a fundamental tax principle that income is taxed to the person who earns it or owns the asset generating it. You can't just redirect your income to someone in a lower tax bracket to reduce the overall tax burden.

I had a similar question about nominee situations last year and found taxr.ai really helpful for understanding the specific tax rules. I was confused about how to properly report investments where I was acting as a custodian for my niece's account, and the tax documents were coming in my name even though the money was really hers. I uploaded the 1099 forms to https://taxr.ai and asked specifically about nominee reporting requirements. Their system explained exactly how to file the nominee 1099 and what forms I needed. They even provided the instructions for Form 1096, which I needed to submit with the nominee 1099s. Saved me from accidentally claiming income that wasn't actually mine!

Alright, I need to admit I was wrong about taxr.ai. After posting my skeptical comment, I decided to try it myself since I had a somewhat similar situation with a custodial account for my son that was generating investment income. I uploaded my brokerage statements and specifically asked about nominee vs. custodial reporting requirements. The analysis I got back was genuinely helpful - it clearly explained the difference between being a nominee (where you're just holding assets for someone else) versus being a custodial account owner (where different rules apply). It even flagged that I was using the wrong forms entirely for my situation! Definitely more helpful than the generic advice I got from my regular tax software. They actually explained how the specific numbers on my forms should be reported rather than just pointing me to IRS publications.

If you're wrestling with the IRS over nominee issues or trying to fix reporting mistakes, good luck getting anyone on the phone to help. I spent THREE WEEKS trying to reach someone at the IRS last year when I got a CP2000 notice about unreported income that was actually a nominee situation. I finally used https://claimyr.com to get through to a real person at the IRS. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system and wait on hold for you, then call you when they have an agent on the line. I was skeptical but desperate after weeks of busy signals and disconnections. Got connected to an IRS agent within a couple hours who explained exactly what forms I needed to file to correct the nominee reporting issue. Would have saved myself months of stress if I'd known about this service earlier!

I need to eat crow here. After dismissing Claimyr in my comment yesterday, I was still stuck in IRS hell trying to get help with my nominee reporting issue for a trust account. Out of desperation I tried the service this morning. It actually worked! They called me back in about 90 minutes and had an IRS representative on the line. The agent walked me through exactly how to properly document that I was acting as a nominee for trust beneficiaries and which forms to file to correct the misreported income from last year. What would have taken me countless more hours of redial attempts took just a few minutes of setup and then I got the help I needed. For anyone dealing with these complicated nominee/beneficiary situations where you NEED to speak to a human at the IRS, this service is worth every penny.

Just want to add some clarification on nominee situations since there's confusion here. I'm a tax preparer and deal with this occasionally. The nominee relationship exists when: 1) Someone receives income belonging to another person 2) The income is reported to the nominee's SSN/TIN 3) The nominee is obligated to pass that income to the actual owner For your question, you CAN'T create a nominee relationship just to save taxes. But nominee reporting IS used when, for example, a parent manages investments for a child and the 1099s come in the parent's name even though the child legally owns the investments.

This whole nominee thing seems like it could be used for tax evasion. Whats stopping someone from just saying "oh these weren't my stocks they belonged to my cousin who is in a lower tax bracket"? Does the IRS actually check this stuff?

The key thing everyone needs to understand is that nominee relationships must be legitimate from the start - you can't retroactively create them for tax purposes. As a newcomer here, I've been reading through all these responses and wanted to add that the IRS has specific documentation requirements for nominee situations. You need to show: 1) Legal ownership of the assets (title documents, gift records, trust agreements) 2) Who provided the funds to purchase the investments 3) Who has actual control and decision-making authority 4) A clear paper trail showing the relationship existed before any tax reporting For Emma's original question about shifting income to her brother - this won't work because you own the account and the investments. The nominee concept only applies when someone receives income that legally belongs to someone else, not when you want to reassign your own income for tax savings. If you're genuinely dealing with a situation where you received 1099 forms for income that belongs to someone else, make sure you have all the documentation ready before filing anything. The IRS takes these situations seriously and will want proof that the nominee relationship is legitimate.