topic Kiddie tax and capital gain in Get your taxes done using TurboTax

Kiddie tax and capital gain

ccthealias — Wed, 11 Feb 2026 04:44:42 GMT

My child has unearned income and I m trying to understand how taxes is calculated for capital gains if the total income exceed 2500 as capital gains are taxes differently than dividends

for example

800 dividend

2000 long term capital gain.

How would the tax be calculated in this scenario?

Re: Kiddie tax and capital gain

Critter-3 — Fri, 02 Feb 2024 12:36:28 GMT

The tax is calculated on the form 8615 and will be in part based on the parent's income ... complete the parent's return first so you have the information needed for the child's return.

https://www.irs.gov/pub/irs-pdf/f8615.pdf

Re: Kiddie tax and capital gain

ccthealias — Fri, 02 Feb 2024 12:48:59 GMT

Sorry my question is if the kid’s income comprise of nonqualifed dividends and capital gains and the parents marginal tax rate is 24% but capital gains is at 15%. What would be the rate applied for amount pass the 2500 threshold

Re: Kiddie tax and capital gain

Critter-3 — Fri, 02 Feb 2024 12:51:42 GMT

Again it will be calculated based on the parent's income rate for the Cap Gains maxed at 15% or 20%. Review the form prior to file or complete the TT interview and see what TT did on the 8615.

Re: Kiddie tax and capital gain

Hal_Al — Fri, 02 Feb 2024 13:12:09 GMT

Q. If the kid’s income comprise of non-qualifed dividends and capital gains and the parents marginal tax rate is 24% but capital gains is at 15%. What would be the rate applied for amount pass the 2500 threshold.

A. Simple answer:15%. But, it would depend on how close the parent's income is to the next bracket. Some could be at 20% (unlikely).

It is what it is and will be calculated on form 8615. Any difference will be miniscule. It was having to deal with this complicated calculation that first got me to buy TurboTax, 25 years ago!