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brous31
New Member

How should child proceed from stock sale be reported when filing on parent return

My son sold some stock, but I am including his income on my return as he meets the requirement.  Where do I report the gain from the sale?

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Accepted Solutions
rjs
Level 15
Level 15

How should child proceed from stock sale be reported when filing on parent return

You cannot report your son's sale of stock on your tax return. Because of the stock sale, he does not meet the requirements for you to report his income on your return. One of the requirements is that "Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends)." Capital gain from a sale of stock is not a capital gain distribution. A capital gain distribution is a type of dividend paid by mutual funds and reported on Form 1099-DIV. The gain from the sale of stock does not fit this requirement.

Your son has to file his own tax return and report all his income on his own return, including the stock sale.

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1 Reply
rjs
Level 15
Level 15

How should child proceed from stock sale be reported when filing on parent return

You cannot report your son's sale of stock on your tax return. Because of the stock sale, he does not meet the requirements for you to report his income on your return. One of the requirements is that "Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends)." Capital gain from a sale of stock is not a capital gain distribution. A capital gain distribution is a type of dividend paid by mutual funds and reported on Form 1099-DIV. The gain from the sale of stock does not fit this requirement.

Your son has to file his own tax return and report all his income on his own return, including the stock sale.

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