Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next
Author: billw8 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121105  
Subject: Re: Joint brokerage account Date: 1/26/2000 1:25 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Thanks to all who replied. After reading your posts, I realize that a joint brokerage account would be a bad idea. Your replies have raised additional questions in my mind.

I intend to sell stock that I own to a friend by transferring the stock from my brokerage account to my friend's brokerage account. Does a Form 1099B need to be completed? If so, should it be completed by the friend or myself?

Some people have said that they report this info in a nominee fashion as opposed to using a 1099. I am confused as to how that would work since the stock sale may involve a capital gain/loss as opposed to interest income. If a 1099 is not the best route, how do I go about doing the nominee thing?

The above is the short version of my question. The following is the long version. I have an American Express brokerage account ($100,000 plus) that enables me to buy and sell stocks without paying a commission. I have a friend who would like to start buying and selling stocks, but he has only about $1,000 to invest. I want to help him buy and sell without him having to incur the commission fees which can eat up a small account.

My goal is to buy the stock that he wants and then write a letter to his broker, TDWaterhouse, in which I agree to transfer the stock to his brokerage account. (If necessary to accomplish this I can establish my own separate TDWaterhouse account.) My friend will write me a check to reimburse me for the stock purchase. When I transfer the stock to him via a letter written to his or my brokerage account, it is my understanding that the broker will not send in a 1099B for this transaction. Do I need to complete one? If so, can the sale proceeds be shown as the proceeds on the date I bought the stock or do the proceeds have to be shown as of the fair market value on the date the stock was transferred into his account? Ideally, the proceeds will reflect the stock price on the date I bought the stock since that is the price that I intend to sell it to my friend. If it would be better, I can always have my friend pay for the stock as of the FMV on the date of transfer and do the 1099B that way too.

Later on my friend may want to sell his stock in which case the stock would be transfered to my American Express account so I can sell it without a commission fee.

I know this is a lot of paperwork and hassle just to avoid a $12 brokerage fee. But my friend's account is small and he seems to be the type that likes to trade a lot. I am assuming that the hard part is figuring out how to get this to work properly. I keep my financial records on Quicken and spitting out a summary of the transactions should not be a problem - just extra paperwork, hopefully.

I thought about going the investment club route, but that seems to be more of a hassle (extra paperwork and fees) considering that this thing just involves two people.

Thanks for your input.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
TMFDeej's CAPS Blog

Activist Investors Unlocking Value at LSB Industries?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement