nominee distribution


A distribution type that ensures that each individual in a joint account pays the appropriate tax on interest accrued on funds saved in a joint account owned by two people since the interest accrued on an income is accounted to only one of the party. It can be made if the other owner is not a spouse; one of the joint account owners files a 1099-NIT form with the IRS (it reports the other person's share of the interest accrued) together with form 1096. This enables the person who has filed to pay tax only on their share of the interest.

Use this term in a sentence

You should try to make sure that you do the nominee distribution right so that everyone gets what they are owed.

​ Was this Helpful? YES  NO 4 people found this helpful.

The nominee distribution was in place to help us out and make everyone pay the appropriate amount that they owed.

​ Was this Helpful? YES  NO 4 people found this helpful.

Bill and his daughter Carol, set up a joint account for taxes planning to use nominee distribution when filing taxes since Carol was a minor.

​ Was this Helpful? YES  NO 9 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
nominee account nominee interest