Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 4
Thank you all for your responses.

You make an excellent point that when selling jointly owned stock, each party is liable for reporting the gain and that Etrade is only fulfilling their reporting requirements for the sale on my 1099-B.
Your suggestion of reporting the full transaction on my return and then backing out my sister's portion sounds reasonable. I say her portion because I still haven't decided whether to sell any of my half just yet. Do I need to supply any documentation with my return to prove she got the money? I was planning to write her a check from my brokerage account after selling and make a notation that it was payment for her half of the stock.

That won't work. If you sell stock that is jointly owned, you each are selling a portion of what is sold. You can't sell just "her" portion, or "your" portion. In order to accomplish this, you must split the account first.

Ira wrote-
You cannot deposit the shares into a joint account with your wife if the shares are held jointly with your sister.

The response from Etrade seemed to indicate we can, assuming the certificate is properly endorsed. I really would hate to go through the trouble of opening a new account only to make a couple transactions and then close it.

The "properly endorsed" certificate is a gift of her portion of the stock to you, subject to all of the rules associated with gifts...that is, possible gift tax return filings, etc. At that point the entire holding is yours and you have no obligation to give anything back to your sister. Any sale will be taxable only to you (and your wife). Any money you return to your sister will constitute a gift from you to her, also subject to gift tax considerations.

To complete the picture, you should issue a nominee Form 1099-B to your sister for her share of the sale.

Got it! And that answers my question on documenting the sale for both my sister and myself.

I plan to deposit the certificate into my existing account. If at that time Etrade decides they can't do that we will open a joint account and keep my SSN as the primary. That way I can be sure of how the transaction is handled. Besides, my sister doesn't have a computer and I will be the one to place the sell order.

I would caution you NOT to deposit the certificate into your account and to open a joint account with your sister and divide the account appropriately.

Print the post  


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.
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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.