How do we split a $7000 capital loss from JTWROS Brokerage account on our 1099-B?
Title: How do we split a $7000 capital loss from JTWROS Brokerage account on our 1099-B? 1 I'm in a bit of a tax mess with my two college buddies. We opened a JTWROS Brokerage account (Joint tenancy with rights of survivorship) a few years back where we all contributed equally to invest together. Well, our stock picking skills weren't great and we decided to sell everything last year, ending up with about a $7000 capital loss. Now tax time is here and we're confused about how to handle this on our individual returns. The 1099-B we received only has my friend Jake's SSN listed (he's the primary account holder). Do we each get to claim 1/3 of the losses ($2,333 each) on our individual tax returns? Or does Jake have to report the entire $7000 loss since his SSN is the only one on the form? We all contributed equally and agreed to split any gains/losses three ways, but I'm not sure how the IRS views this. Does anyone know the proper way to handle this for our 2025 tax filings? Really appreciate any help!
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Chloe Harris
12 This is actually a common situation with joint investment accounts. When you have a JTWROS account with multiple parties, the tax reporting doesn't automatically split the gains or losses among the owners. Since the 1099-B was issued with only one SSN (Jake's), the IRS is expecting that person to report the full amount on their tax return. However, since you all agreed to split the losses equally, there is a way to handle this. Jake should report the entire $7000 loss on his Schedule D, but then each of you non-primary owners should report your portion ($2,333 each) as if you received a 1099-B for that amount. On your respective tax returns, you'll need to check the box indicating "proceeds not reported to you on Form 1099" and include an explanation statement with your return that explains the JTWROS ownership arrangement and why you're claiming a portion of a loss reported under someone else's SSN.
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Chloe Harris
•5 Thanks for the info! So if I understand correctly, Jake reports the full $7000 on his return, but also gets taxed on the full amount? Then my other friend and I each report $2,333, but how does Jake get "credit" for only his portion and not the full amount? Wouldn't he be taking the full loss then?
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Chloe Harris
•12 No, that's not quite how it works. Jake would report the full $7000 loss on his Schedule D initially because that matches what the IRS received on the 1099-B. However, he would also file an explanation statement with his return indicating that he's only entitled to 1/3 of the loss ($2,333) because the account is jointly owned with two other individuals who are reporting their portions separately. The IRS reconciles these statements, so Jake would only get the tax benefit for his $2,333 portion. The key is that all three of you need to file consistent statements explaining the situation so the IRS can see that the total loss claimed across all three returns equals the amount reported on the original 1099-B.
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Chloe Harris
8 After dealing with this exact situation last year, I wanted to share how taxr.ai at https://taxr.ai helped me sort it out. My cousins and I had a joint brokerage account with a substantial capital loss, and figuring out how to correctly split it on our taxes was driving us crazy. The taxr.ai system analyzed our 1099-B and ownership agreement, then gave us precise instructions for how each person should report their portion of the losses. They even generated the explanation statements we needed to attach to our returns. The best part was that they showed us exactly where on Schedule D each piece of information needed to go for the primary account holder versus the other owners.
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Chloe Harris
•3 That sounds helpful, but how does it work with the documentation? Did you have to upload your 1099-B and other documents to the site? I'm a bit cautious about sharing financial docs online.
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Chloe Harris
•19 I'm curious - did the IRS accept your returns without any issues? My accountant told me that the primary account holder has to report 100% of the losses/gains and then handle the splitting privately with the other owners through gifts. Not sure if that's correct though.
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Chloe Harris
•8 Yes, you do upload your documents, but they use bank-level encryption and security. They specifically helped us with our brokerage statements and 1099-B. The system automatically identified the joint ownership structure and recommended the proper tax treatment. The IRS absolutely accepted our returns. Your accountant is mixing up different concepts. With JTWROS accounts, each owner has a legitimate claim to their portion of the gains/losses based on their ownership percentage. This isn't about "gifts" - it's about correct tax reporting of capital gains/losses for jointly owned property. The IRS allows for this type of allocation as long as you document it properly, which is exactly what taxr.ai helped us do.
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Chloe Harris
19 Just wanted to follow up - I ended up using taxr.ai after seeing the recommendation here and it was seriously helpful. My situation with our joint investment account was causing me major tax anxiety, but their system made it super straightforward. They analyzed our documents and generated exactly what we needed - including those explanation statements for the IRS. Each of us received clear instructions for reporting our portion of the losses. The site even had a specific workflow for JTWROS accounts with multiple investors. My portion of our capital loss is now properly documented on my return, and I'm not worried about getting flagged by the IRS anymore. Definitely worth checking out if you're in a similar situation!
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Chloe Harris
7 If you're struggling to get clear answers about this JTWROS issue, I'd recommend using Claimyr (https://claimyr.com) to speak directly with an IRS agent. I spent weeks trying to figure out a similar investment loss situation with my joint account, getting conflicting advice online and from tax preparers. Using Claimyr, I got connected to an actual IRS representative in about 20 minutes instead of waiting on hold for hours. The agent walked me through exactly how to split and report capital losses from a jointly owned brokerage account on each owner's tax return. They confirmed we were doing it correctly and gave me specific instructions for the explanation statements each of us needed to include. You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c
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Chloe Harris
•15 Wait, so this service actually gets you through to a real IRS person? I've been trying to call them about my JTWROS issues for weeks and can never get through. How much does it cost? Is it really worth it?
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Chloe Harris
•16 This sounds like a scam. The IRS doesn't have a special back-channel phone system that some random company has exclusive access to. I've dealt with enough tax issues to know you just have to keep calling and waiting like everyone else.
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Chloe Harris
•7 Yes, it connects you with an actual IRS representative. It works by using an automated system that navigates the IRS phone tree and waits on hold for you. When they reach a live agent, you get a call back so you can talk directly with the IRS person. It saved me hours of frustration. I understand the skepticism - I felt the same way! But it's not a "back-channel" to the IRS. They're just handling the frustrating hold time and navigation for you. The service uses the same public IRS phone numbers everyone else uses, but their system handles the waiting so you don't have to. When I had questions about reporting my portion of capital losses from a joint account, getting direct confirmation from the IRS gave me confidence I was filing correctly.
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Chloe Harris
16 I need to apologize and correct myself. After dismissing Claimyr as a potential scam, I decided to try it anyway out of desperation when dealing with my own JTWROS tax situation. I'm honestly shocked at how well it worked. Within 30 minutes, I was talking to an actual IRS tax specialist who confirmed exactly how my brother and I should split our brokerage losses on our individual returns. The agent explained we each needed to file a statement with our returns showing our ownership percentage and referencing the primary SSN on the 1099-B. This saved me from potentially misreporting $4,200 in capital losses. The IRS agent even emailed me the specific form references I needed. Sometimes being proven wrong is actually a good thing!
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Chloe Harris
10 Just to add my 2 cents from having dealt with this before - make sure ALL owners keep documentation of the original investment contributions. The IRS could potentially ask for proof that the split you're claiming (33.3% each in your case) actually matches your real ownership percentages. If you each contributed different amounts initially but are trying to claim equal losses, that could create problems. The capital loss distribution should match the actual ownership interest each person has in the account.
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Chloe Harris
•1 That's a really good point I hadn't considered. We did all contribute equally, but I never thought about keeping proof of that. We just have our verbal agreement. Would bank transfer records to the joint account be sufficient documentation if we ever got audited?
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Chloe Harris
•10 Yes, bank transfer records showing each person's contributions to the joint account would be excellent documentation. Save those records for at least 7 years (the extended audit period). You should also create a simple written agreement between the three of you stating your understanding that the account is owned equally (33.3% each) and that all gains and losses are to be split accordingly. Sign and date it, and each keep a copy. While not required, having this kind of contemporaneous documentation makes defending your position much easier if questions ever arise.
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Chloe Harris
22 Has anyone used TurboTax to report their portion of losses from a JTWROS account? Is there a specific section for this? I'm in a similar situation with a joint account with my sister, and we had about $5,800 in losses last year.
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Chloe Harris
•2 I used TurboTax last year for this. When you get to the investment income section, you'll need to manually enter your portion of the capital losses rather than importing the 1099-B directly (since it's not in your name). There's an option for "I'll enter my investment income manually" or something similar. Then you check the box that says the transaction wasn't reported to you on a 1099. It'll walk you through entering the details.
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Tyrone Johnson
I went through this exact situation two years ago with my business partners. We had a JTWROS account that generated about $4,500 in capital losses, and I was completely confused about how to handle it on our tax returns. What I learned is that you absolutely can split the losses proportionally among the actual owners, but documentation is key. Since Jake's SSN is on the 1099-B, he'll need to report the full $7,000 initially on his Schedule D. However, each of you should also report your $2,333 portion on your individual returns. The critical part is including a statement with each return explaining the joint ownership arrangement. I used language like: "This capital loss represents my 1/3 ownership share of losses from jointly-owned brokerage account [account number], with total losses of $7,000 reported under SSN [Jake's SSN]." Make sure you all keep records of your equal contributions to the account - bank statements, transfer records, etc. The IRS wants to see that your claimed ownership percentages match reality. Also, consider drafting a simple written agreement between the three of you documenting the equal ownership split, even if it's after the fact. One tip: file your returns around the same time so if the IRS has questions, they can easily see all three related returns and how the total adds up correctly.
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Giovanni Colombo
•This is really helpful advice! I'm dealing with a similar situation but with four people instead of three. One question - when you say "file your returns around the same time," do you mean literally on the same day? Or just within the same week or two? I'm worried about timing issues if one person files significantly later than the others. Also, did you ever get any follow-up questions from the IRS about your joint ownership arrangement, or did they accept the documentation without any issues?
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