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I sold a friend's shares in a company through my brokerage account as a favor. (She signed the stock certificates over to my account, I sold them and gave her the proceeds.)

How do we let the IRS know that the transaction (and associated gains) is hers and not mine?
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You don't. You received the shares as a gift, you acquired your friend's cost basis, you realized the capital gain, you are responsible for paying taxes on the gain. Hopefully your friend will be willing to reimburse you for the tax you pay on it.

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uhclem: "You don't. You received the shares as a gift, you acquired your friend's cost basis, you realized the capital gain, you are responsible for paying taxes on the gain. Hopefully your friend will be willing to reimburse you for the tax you pay on it."

This response does not sound correct to me, but I am no expert. The original post sounded more like a nominee situtation rather than a gift, but I do not know enough tax law to comment there either.

I hope some of the other resident pros will weigh in on this issue, if they have not already done so. (posted before reading all responses)

Regards, JAFO


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<< I sold a friend's shares in a company through my brokerage account as a favor. (She signed the stock certificates over to my account, I sold them and gave her the proceeds.)

How do we let the IRS know that the transaction (and associated gains) is hers and not mine? >>

You file a 1099-B showing yourself as the payor and her as the payee, with all the information that was on your 1099-B. You transmit it to the IRS on Form 1096. She includes the transaction on her Schedule D.

Your deadline for sending the IRS its copy is, I believe, 2/29 if this was a 1999 sale, so get hopping.

Phil Marti
Tax Preparer
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