The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Tax liability for JTWROS Date:  10/2/2012  2:16 AM
Author:  harbor991 Number:  116722 of 129670

Hello all,

My mother passed away recently leaving behind me and two brothers as the surviving owners of her former residence that was deeded Joint Tenancy with Rights of Survivorship (JTWROS). Although we three now own the house, one of the brothers who is partially disabled lives in it in exchange for paying the property taxes, keeping it insured, and performing day-to-day maintenance. He also pays his own living expenses related to his occupancy such as utilities, phone, etc. I and the other brother receive no financial payments or considerations from this arrangement, nor do we incur any expenses.

In her Will our mother also left us $15,000 to be held jointly by the three of us in any investment vehicle of our choosing, but with expenditures restricted to repair/replacement of major mechanicals such as furnace, AC, roof, water heater, etc. Since the house was fully updated recently, the need to draw from these funds in the next few years is remote. Consequently, we have decided to open a standard, jointly owned brokerage account titled JTWROS. Some of these funds will draw interest or be invested in stocks that will generate dividends and/or capital gains in the future.

My question deals with the tax reporting of any future interest, capital gains and/or dividends. I know the broker will only issue one 1099 and link it to the social security number of that one of us receiving the form. From the prospective of joint ownership, how do the three of us handle this? Does that one individual report for tax purposes and we all then informally work out the money differences? Or do all three of us have to report our portion of the interest/capital gains/dividends? The amounts will probably be small, so our hope is that just one of us can report and pay the taxes and work out any differences with the others. Our fears are that if the tax reporting requirements become too complex or spread out for this relatively small sum of money, we may be better off just buying an old mattress to stuff the money into.

Thanks for any help,

Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us