What are nominee dividends?
Nominee dividends are dividends that you receive on behalf of another person. So part or all of the dividends belongs to someone else even though you receive the Form 1099-DIV. The amount you enter for nominee dividends will reduce the amount of taxable dividend income shown on your return.
For example, you and your brother own stocks together and you receive a Form 1099-DIV with $100 in dividends. If $30 of the dividend income belongs to your brother, then you need to enter the Form 1099-DIV and enter the full $100 shown in Box 1a of the Form 1099-DIV, but then you enter $30 as nominee dividends so you end up only reporting $70 in taxable dividend income on your tax return.
For example, you and your brother own stocks together and you receive a Form 1099-DIV with $100 in dividends. If $30 of the dividend income belongs to your brother, then you need to enter the Form 1099-DIV and enter the full $100 shown in Box 1a of the Form 1099-DIV, but then you enter $30 as nominee dividends so you end up only reporting $70 in taxable dividend income on your tax return.
