Q. My son's AGI is 15k. But he "owes". Why?
A. Why do you think otherwise?
The maximum standard deduction is $12,550. 15,000 - 12,550 = $2450 taxable income.
But, dependents don't always get the full $12,550 standard deduction. A dependent's standard deduction is the greater of $1100 or his earned income + $350, but no more than $12,550. Based on the numbers you provided, he gets a standard deduction of $5350. 15,000 - 5350 = $9650 taxable income. The $2000 long term capital gain will be taxed at 0%.
Follow the flow on form 1040. The tax calculation for the amount on line 16 will be shown on the "Qualified dividends and capital gains worksheet.
