This situation is real, but I’ve greatly simplified it.
John and Mary were married for 20 years, but have been estranged and living separately for the last three years. Throughout 2022 they’ve been working out an amicable divorce settlement. On November 30th the divorce was legally finalized.
John and Mary have one joint investment account at Fidelity. It’s a joint account, but the address on it is John’s address. The account holds 100 shares of XYZ Corporation. In March, June, and September, XYZ declared a $1.00/share dividend. On November 30th John and Mary split the joint account into two separate, individual accounts at Fidelity (thus the joint account and John’s new individual account have different account numbers.) Each of the two individual accounts now (as of December 1) hold 50 shares of XYZ Corp.
On December 10th XYZ declares its usual quarterly $1.00/share dividend, to shareholders as of December 15th, payable on December 20th. So this Q4 dividend will go $50 to John in his individual account and $50 to Mary in her individual account. Note that the IRS says that if you are divorced on December 31st you were divorced for the entire year. Thus, John and Mary will be filing individual tax returns for 2022.
Question 1. Does (do) the 1099-DIV(s) come from Fidelity or from XYZ Corp?
Question 2. Is one 1099-DIV sent to John, covering the entire year? Or do three 1099-DIVs get sent out – one to John for the first three dividends, and then one each to John and Mary for the fourth dividend?
Question 3. John and Mary agree that for the first three dividends, they should split them evenly on their 2022 taxes, and thus each should declare $1.50/share. But none of the 1099-DIVs will show $1.50/share. So how do John and Mary report this on their 2022 individual tax returns?
Thanks for your help.
John and Mary were married for 20 years, but have been estranged and living separately for the last three years. Throughout 2022 they’ve been working out an amicable divorce settlement. On November 30th the divorce was legally finalized.
John and Mary have one joint investment account at Fidelity. It’s a joint account, but the address on it is John’s address. The account holds 100 shares of XYZ Corporation. In March, June, and September, XYZ declared a $1.00/share dividend. On November 30th John and Mary split the joint account into two separate, individual accounts at Fidelity (thus the joint account and John’s new individual account have different account numbers.) Each of the two individual accounts now (as of December 1) hold 50 shares of XYZ Corp.
On December 10th XYZ declares its usual quarterly $1.00/share dividend, to shareholders as of December 15th, payable on December 20th. So this Q4 dividend will go $50 to John in his individual account and $50 to Mary in her individual account. Note that the IRS says that if you are divorced on December 31st you were divorced for the entire year. Thus, John and Mary will be filing individual tax returns for 2022.
Question 1. Does (do) the 1099-DIV(s) come from Fidelity or from XYZ Corp?
Question 2. Is one 1099-DIV sent to John, covering the entire year? Or do three 1099-DIVs get sent out – one to John for the first three dividends, and then one each to John and Mary for the fourth dividend?
Question 3. John and Mary agree that for the first three dividends, they should split them evenly on their 2022 taxes, and thus each should declare $1.50/share. But none of the 1099-DIVs will show $1.50/share. So how do John and Mary report this on their 2022 individual tax returns?
Thanks for your help.