Nominee Capital Gains

From IRA Pub 564 "If you received a capital gain distribution or were allocated an undistributed capital gain as a nominee, report only the amount that belongs to you on line 10 of Form 1040A, line 13 of Form 1040, or Schedule D (Form 1040), whichever is appropriate. Attach a statement to your return showing the full amount you received or were allocated and the amount you received or were allocated as a nominee."

Each of the tax prep programs I've tried (TaxAct, TaxCut, TurboTax) treat nominee interest and ordinary dividends correctly (i.e. subtotal and subtract nominee amount on schedule B), but ignore nominee cap gains. No statement is created as required per Pub 564.

Since I have to manually create the required statement, does that mean I can't use any of these tax prep programs to e-file?

Turbotax gives you two ways to handle this. The default is to prorate the nominee adjustment across dividends and capital gains, see the help file for topic "prorating dividends for adjustments".

The other way would be to enter your 1099-DIV as if it were two

1099-DIV's, one for dividends only and one for capital gains distributions only. This allows you to have a little more control.

I see a statement generated automatically when I test this. If you do not, perhaps it is only a feature of the higher-end (more costly) version(s) of Turbotax.

Now, if only one could use nominee treatment for actual capital gains or losses (1099-B)...sigh.

-Mark Bole