1099-B UTMA account, who should have it on their tax return?

[jtneis01]

We received a 1099-B & 1099-div for my son's UTMA account.  Does this go on our tax return or his.  He did have a PT job in 2016 that he made under $4300.

[AnnetteB · Accepted solution]

Transactions reported on Form 1099-B should be included on your son’s tax return.  His return will also include the 1099-DIV and his wages.

The only income that would be eligible to be reported on your return instead of your son’s is dividend and/or interest income.  Transactions that result in a capital gain or loss cannot be included on your personal return. 

[user314]

What if the son didn't have a job or wage income and only 1099-B capital gain lower than $1,100.  Would the $1,100 unearned income exclusion apply to capital gains under that amount such that no tax return would need to be filed?

[JohnW222]

@user314

You’re correct, your son’s scenario appears to be different from the original poster’s.  He may not even need to file a return.

Please see the TurboTax Help article "Do I need to file my own taxes if I'm a dependent?" for more information.

[jmallen72]

My question is about not reporting capital gains, only interest and dividends, on parent's return.  If I am using form 8814 to report, then there is a specific line (line 3 on 2020 form) for parents to report CGs. Why then do you say CGs are not to be reported on parent's return?  My specific interest is in UTMA CGs. Thanks

[MarilynG1]

@jmallen72 Click this link for detailed info on Filing Requirements for Children.

You wouldn't add Capital Gains on Form 8814 if the child had Earned Income; they would file their own return.

If your child is your Dependent and had no Earned Income, you an add their Capital Gains on Form 8814.

[jmallen72]

Thanks for your reply. This is an UTMA account and no 1099 was issued.  I do have the mutual fund statement for 2020 that shows the short term and long term capital gains for the year.  The dependent did have earned income, but not enough to file a federal return.  With the capital gains and earned income combined, there is enough to file a state return.  Where does this go in Turbo Tax? Thanks

[MarilynG1]

@jmallen72  Your son would not be able to prepare a State Return separate from your Federal Return.

He could set up his own account in TurboTax, prepare a Federal Return (and elect not to file it) and prepare a State Return at the same time for paper-filing. 

Click this link for more info on Filing Separate Federal and State Returns.

[fireheart7]

My kids received 1099-B's for less than $2 and they do not earn wages.  Could report their 1099-DIV on mine and not have to do anything with the 1099-B because they do not earn income?

[JamesG1]

You are not required to report their income on your personal tax return.

The income that your dependent children earned falls beneath the 2021 dependent filing requirements.

The dependent filing requirement is:

• Unearned income was more than $1,100.
• Earned income was more than $12,550
• Gross income was more than the larger of:
•      $1,100, or
•      Earned income plus $350.

Single filing requirement of $12,550.

@fireheart7

[cindysunny]

What if the amount is between $1,100 and $2,200?

[cindysunny]

What to do if 1099-B is more than $1100 but lower than 2200?

[Hal_Al]

The amount on form 1099-B does not determine whether you need to file.  It's the capital gain on the proceeds that determine if you have to file.  If that gain is more than $1100, your are required to file (even if less than $2200). 

In a case where a long term capital gain is more than $1100, but less than $2200, no tax will be due (the LT gain is tax at 0%) but you are still required to file.