If his only income is from interest and dividends, Alaska PFD or capital gains distributions shown on a 1099-DIV, there is a provision for entering it on your return, using form 8814.
It doesn't apply in your case because there are capital gains/losses from the sale of securities.
You do not need to file a tax return, for the kids, but you may want to anyway to document the capital loss carry forward to future years. Even you don't file, you may want to prepare a return to properly calculate the amount of carry over. If the $1100 filing threshold is not met, the entire amount usually carries forward.
If your dependent child is under age 19 (or under 24 if a full time student), he or she must file a tax return for 2020 if he had any of the following:
- Total income (wages, salaries, taxable scholarship etc.) of more than $12,400 (2020).
- Unearned income (interest, dividends, capital gains, unemployment) of more than $1100.
- Unearned income over $350 and gross income of more than $1100
- Household employee income (e.g. baby sitting, lawn mowing) over $2100 ($12,400 if under age 18)
- Other self employment income over $432, including money on a form 1099-NEC
