My 3 year old child has a UTMA in his name I manage that has generated capital gains and it is not showing any federal tax due on his own tax filing even if I enter a large capital gain (like $10,000 in gains). The state tax updates properly. It only starts showing federal tax if I enter he has a long term capital gain of over $45,000! I know this isn't correct given Kiddie Tax laws/rates.
When I started his filing I answered that he is being claimed as a dependent and I saw where he was only supposed to get a small standard deduction because of that. I suspect it assume I'm claiming his income on my own tax filing, but I can't find where to set that and it never asked me if I was. I would like his taxes to be on his own because his actual tax should be fairly low.
