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UTMA, Loss carryovers, states and Turbotax

My son is a full time college student in CA who turned 21 at the end of 2023.  His permanent residence is in NY.  I had a UTMA account for him that became his when he turned 21.  Just prior to it becoming his we sold the individual stocks in it for a $2000 loss and put the proceeds in an idex fund.  He earned a $500 at a part time job at the University (got a W-2) and got another $500 in dividends from the UTMA (got a 1099 B and DIV for sale loss and dividends).  I claim him as a dependent on my taxes.  I understand that he should file a federal tax return.  I have several questions:

1. His total earned and unearned income is less than the $1250 personal exemption.  In Turbotax, the $2000 stock loss is subtracted from income (giving a -$1000 income), then the $1250 exemption is applied.  Can't the entire $2000 loss be carried over to next year when it will make a real difference to his income (presumably greater income since he will graduate and have a job for half the year)?  Is there any way to have the entire loss carried over to next year since he wouldn't pay any tax this year anyway due to his small income? 

2. Does he also have to file in NY and CA since his earned income is in CA but residence is in NY and he filed a federal return (they cost $40 each through Turbotax)?

Thank you for your help.

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1 Best answer

Accepted Solutions
KrisD15
Employee Tax Expert

UTMA, Loss carryovers, states and Turbotax

California has a 1250 threshold for Dependents, 3100 for New York, so no, the student needn't file either state.

 

If the loss was not all used on the student's 2023 return (no the loss can't be saved for 2024) the loss carryover will be done on his/her 2024 federal return, therefore it will be reflected on  the 2024 state return as well. 

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1 Reply
KrisD15
Employee Tax Expert

UTMA, Loss carryovers, states and Turbotax

California has a 1250 threshold for Dependents, 3100 for New York, so no, the student needn't file either state.

 

If the loss was not all used on the student's 2023 return (no the loss can't be saved for 2024) the loss carryover will be done on his/her 2024 federal return, therefore it will be reflected on  the 2024 state return as well. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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