Joint brokerage account with my brother - do regular people actually have to issue 1099's to each other?

You're dealing with what's called nominee income reporting, and yes, regular individuals sometimes need to issue 1099s to others - even family members. Since your SSN is the primary on the account, the IRS sees all income (dividends, interest, capital gains) as yours, even though your brother has partial ownership. You have two main options here: 1) You can file a 1099 for your brother's portion of the income. This means you'd report the full amount on your tax return, then subtract his portion as "nominee distribution" on Schedule B. You'd also need to file Form 1096 with the IRS. 2) Alternatively, you could restructure the account to have separate percentages clearly defined with the brokerage, or create separate accounts. Many families in your situation often choose to simply split the tax burden informally, with each person reporting their share of the income on their own returns without the formal 1099 process, but this technically isn't compliant with IRS rules.

I was in a similar situation with my cousin last year and discovered taxr.ai (https://taxr.ai) which actually helped us sort through this mess. We had a joint investment account for our grandparents' care and were totally confused about the tax reporting requirements. The tool analyzed our brokerage statements and showed us exactly how to handle the nominee reporting situation. It explained what portions of the dividends and capital gains belonged to each of us based on our contribution percentages. What I found most helpful was that it generated the specific line items for our tax returns and explained where to report the nominee distributions.

I wanted to follow up about my experience with taxr.ai after trying it. I was initially skeptical but decided to give it a shot with our joint account situation. Honestly, it was way more helpful than I expected. The service walked me through the entire nominee reporting process and showed me exactly what portions of our dividends and capital gains belonged to each account holder. What really surprised me was how it broke down the reporting requirements in plain English. It generated a step-by-step checklist for filing the nominee distributions, including the specific schedules and forms needed. The platform even has a specific module for joint brokerage accounts that explained the 60/40 split calculation better than my CPA did. Now both my sister and I are reporting our correct portions of the investment income without the headache.

If you're struggling to get answers from your brokerage or finding conflicting information online, you might want to just call the IRS directly - but good luck getting through! I spent TWO WEEKS trying to reach someone about a similar nominee situation. Finally discovered a service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent confirmed that yes, technically you're supposed to issue a 1099 to your brother as a nominee distribution, but also explained some simplified approaches for family situations.

I need to eat my words and apologize. After my skeptical comment, I was desperate enough to try Claimyr for my joint account issue with my sister. I got connected to an IRS agent in about 15 minutes, which honestly felt like some kind of miracle after my previous failed attempts. The agent explained that while yes, technically I should issue a 1099 to my sister for her portion of our joint account income, there's a simplified method for family situations. She walked me through exactly how to report the nominee distributions on Schedule B and which boxes to check on my tax forms. She even emailed me the relevant IRS publication sections afterward. This saved me from overpaying taxes on income that wasn't really mine. Definitely worth the service fee to get actual official guidance instead of conflicting advice online.

Have you considered just creating a partnership return instead? My brother and I had the same issue and our accountant suggested filing a Form 1065 (Partnership Return) with K-1s distributed to each of us based on our ownership percentages. It's more formal but actually easier in the long run than the nominee distribution route.

PROTIP from someone who works at a brokerage: The easiest solution is to NOT have a joint account at all! Open separate individual accounts and coordinate your investments. This completely eliminates the nominee tax headache. Each person gets their own 1099 from the brokerage, reports their own investment income, and you just informally track contributions toward your dad's care.

I went through this exact same situation with my sister last year for our mom's care fund. The nominee reporting is a real requirement, but there's actually a middle-ground approach that worked well for us. We kept the joint account (since emergency access was important) but created a simple written agreement documenting our contribution percentages and how we'd handle the tax reporting. Each tax season, I calculate her portion of the dividends and capital gains based on our agreement, then report it as a nominee distribution on Schedule B. The key is keeping good records of your contributions throughout the year - I use a simple spreadsheet tracking deposits and the running percentage split. This makes the year-end tax calculations much easier. Your brother should also keep records showing he received his portion of the income from you. One thing that helped us was setting up automatic monthly transfers from our individual accounts to the joint account on the same day each month. This creates a clear paper trail of the 65/35 split you mentioned, which makes the tax reporting more straightforward if anyone ever questions it.