If income-producing property is held jointly by a married couple filing a joint return, the income tax consequences are straightforward: the couple owes tax on the income. But what if the married couple files separate returns? What if the co-owners aren’t married and thus can’t file a joint return?
Typically, the income will be taxed 50-50, between the joint owners. In some cases, though, income will be taxed to the person who contributed the assets to the account. In these situations, it is vital that income reporting refer to the party who contributed the assets.
Suppose, for example, George Harris has put his niece Irene’s name on his bank and brokerage accounts so she can help manage his affairs, if that becomes necessary. George and Irene should make sure that George’s Social Security number is the one on the account, so that each annual Form 1099 reports income taxable to George, not to Irene.
