turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
turbotax icon
turbotax icon
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

dd4932513
New Member

Dependent capital gains

Do  we have to pay taxes on capital gains from a stock sale of my sons who had no taxable income? 

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

4 Replies

Dependent capital gains

If your son sold stock at a profit then the boy must file his own return if it is required ... the stock sale IS income. 

Please see the filing requirements for dependents:

  • Your earned income (money you made by working) exceeds $12,400
  • Your unearned income (interest, dividends, capital gains, etc.) exceeds $1,100
  • Your business or self-employment net income (gross minus expenses) is at least $400
  • Your gross income (earned plus unearned) exceeds the larger of $1,100 or your earned income (up to $12,050) plus $350

 

rjs
Level 15
Level 15

Dependent capital gains

You cannot report your son's capital gain on your tax return. He has to file his own tax return and report the stock sale. He probably will not have to pay any tax, but he should file a return to avoid problems with the IRS.

 

Dependent capital gains

depending on your sons tax situation, he may have to include form 8615 with his return - the kiddy tax - dependent files return or 8814 also kiddy tax but parents report the unearned income on their return

Who Must File
Form 8615 must be filed for any child who meets all of the following
conditions.
1. The child had more than $2,200 of unearned income.
2. The child is required to file a tax return.
3. The child either:
a. Was under age 18 at the end of 2021,

b. Was age 18 at the end of 2021 and didn’t have earned
income that was more than half of the child's support, or
c. Was a full-time student at least age 19 and under age 24 at
the end of 2021 and didn’t have earned income that was more than
half of the child's support.
(Earned income is defined later. Support is defined below.)
4. At least one of the child's parents was alive at the end of
2021.
5. The child doesn’t file a joint return for 2021.
For these rules, the term “child” includes a legally adopted child
and a stepchild. These rules apply whether or not the child is a
dependent. These rules don’t apply if neither of the child’s parents
were living at the end of the year

Purpose of Form
Use this form if you elect to report your child’s income on your return. If you do, your child will not have to file a return. You can make this election if your child meets all of the following conditions.
• The child was under age 19 (or under age 24 if a full-time student) at the end of 2021. “Student” is defined below.
• The child’s only income was from interest and dividends, including capital gain distributions and Alaska Permanent Fund dividends.
• The child’s gross income for 2021 was less than $11,000.
• The child is required to file a 2021 return.
• The child does not file a joint return for 2021.
• There were no estimated tax payments for the child for 2021 (including any overpayment of tax from his or her 2020 return applied to 2021 estimated tax).
• There was no federal income tax withheld from the child’s income.
You must also qualify. 

Parents who qualify to make the election. You qualify to make this election if you file Form 1040, 1040-SR, or 1040-NR and any of the following apply.
• You are filing a joint return for 2021 with the child’s other parent.
• You and the child’s other parent were married to each other but file separate returns for 2021 and you had the higher taxable income.
• You were unmarried, treated as unmarried for federal income tax purposes, or separated from the child’s other parent by a divorce or separate maintenance decree. The child must have lived with you for most of the year (you were the custodial parent). If you were the custodial parent and you remarried, you can make the election on a joint return with your new spouse. But if you and your new spouse do not file a joint return, you qualify to make the election only if you had higher taxable income than your new spouse.

 

rjs
Level 15
Level 15

Dependent capital gains

Form 8615 is for "kiddie tax" on the child's tax return. The "Child's Income" section in TurboTax will determine whether Form 8615 is required, and will fill it out if it's needed.


Form 8814 is for reporting the child's interest and dividends on the parents' tax return. The question is about capital gains. You cannot use Form 8814 for capital gains. Capital gains have to be reported on the child's tax return.

 

Manage cookies