Minor UTMA Capital Loss

Forum|Forum|1 year ago
February 19, 2025
2 replies
17 views

My minor child (under 18) has no income or capital gains, however does have a capital loss to claim in his UTMA account. Should/can taxes be filed under my minor childs SSI to "claim" in capital loss to carry over for future years? Trying to make sure the taxes get filed appropriately.

Ask the Experts - Deciphering - Feb 2025

ThomasM125

Level 15

Yes, your child should file a tax return to report the capital loss, which will be carried over to future years to offset gains later on. It does need to be reported in the year it was incurred.

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Hal_Al

Level 15

Q. Should/can taxes be filed under my minor childs SSI to "claim" in capital loss to carry over for future years?

A. Yes, you can have the child file a tax return to document the capital loss. I am of the opinion that you are not required to do, since his income is less than zero. There's a difference of opinion on that, here in this forum.

You are allowed to manually keep track of your loss carry forward and not enter it until you have to file. The best thing to do is prepare a tax return (even if you aren't required to file) to accurately calculate the carry over to the next year. There are situations where the whole amount will not carry forward.

A bigger issue may be the sale amount shown on the 1099-B. If it's large enough it could trigger an ITS inquiry.