@805teresa wrote:
Thank you for the swift response. I am unclear what you mean when you say that I am "applying conditions that do not apply to [me]". Which conditions do you take me to be applying that do not apply to the envisioned 19-year old (who isn't me, by the way). Thanks much!
"Dependent children" for one thing - the actual tax law makes no reference to dependent children. Having to live with a parent for another - that is not in the tax law.
You also said that I did not address: "It doesn't seem right (and I don't mean by that that it doesn't seem fair, although that's true too, but that it seems like I must be getting something wrong) that such a person has to pay trust rates on unearned income while a similarly situated 25-year old does not."
I totally agree. the entire 8615 (kiddy tax) is unfair. It was originally created by Congress to counteract parents who were transferring stocks, bonds and other investments to their children because the child's tax rate was less, so Congress (in it's wisdom) created a law that taxed that income at the parents tax rate (which was changed to the cap. gains rate in 2018). Why age 23 as a cut off?... I suspect because a student child living at home, no older than 23, can still be a parents dependent.
Tax laws are often unfair - talk to your Congress person about changing it.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
