UTMA 1099-B with tax loss harvesting

[rlg77]

Trying to figure out how to handle the following: we have an UTMA account for my dependent daughter (no earned income). She got a 1099-DIV with $330 in ordinary dividends and $250 in qualified dividends. I did TLH and so she also got a 1099-B with ~$300 in losses.

How should I file?

[PattiF]

If a child's income includes a 1099-B, sale of securities. This will need to go on a separate tax return for the child. Enter the 1099-B along with the 1099-DIV in her tax return.

In fact, you can only report her unearned income on your return if the only income she had for the year was interest, dividends, and capital gains distributions (reported on a 1099-DIV).

Please see Figure 1 in IRS Publication 929, Tax Rules for Children and Dependents

[rlg77]

Thank you!

And if her unearned income was <$1150 (it was $300) am I required to file at all?

[JohnB5677]

No, you will not have to file a return.

The tax applies to dependent children under the age of 18 at the end of the tax year (or full-time students younger than 24) and works like this:

• The first $1,150 of unearned income is covered by the kiddie tax's standard deduction, so it isn't taxed.
• The next $1,150 is taxed at the child's marginal tax rate.
• Anything above $2,300 is taxed at the parents' marginal tax rate.
• If your child also has earned income, say from a summer job, the rules become more complicated. 
• To learn more, see IRS Publication 9291 or consult a tax advisor.

Topic No. 553 Tax on a Child's Investment and Other Unearned Income (Kiddie Tax)