Stock was gifted to my 18 year old son to help pay for college. Some of the stock was sold in 2016 and used towards tuition. Do capital gains go on his return or mine?

[macuser_22 · Accepted solution]

It can only go on his.  

It can only go on your return if  your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends).

Capital gains can only go on the child's own tax return, if required to file.

[alofarabia4]

Thank you. One clarification - my son only made about $1,200 in income from working in 2016 so  don't think he would need to file without the stock issue. Does that change the answer as to whose tax return the capital gains goes on?

[macuser_22]

If the capital gain was more than the $1,050 filing requirement or if the $1,200 was self-employed (not W-2) income over $400, he must file a return.

2016 Filing requirements for dependents.

Federal Dependent filing requirements: (State requirements may be different)
 1) Dependents unearned income was more than $1,050.
 2) Dependents earned income was more than $6,300.
 3) Dependents  gross income was more than the larger of-
       a) $1,050, or
       b) Dependents earned income (up to $5,950) plus $350.
 
Or Dependent had net earnings from self-employment of at least $400. 

However, if any tax was withheld, then Dependent might want to file anyway to get a refund of the tax withheld.

Also, a person that CAN be a dependent cannot claim him/her self and must check the box that says that another taxpayer can claim them (whether or not that taxpayer actually claims him/her).

Note: your state filing requirements might be different than the federal.