Hello
I am having a hard time figuring out how i should file investment income for my daughter. The accounts are in her name and social security number. I am listed as a custodian.
Can I use the form 8814 for claiming the amounts listed below?
if i am able to file her investment income with the 8814 form, do i list the 1099-B income as capital gains?
My daughter (8 years old) has two investment accounts. In 2020, she earned the following:
1099-DIV
Ordinary Dividends: $903
Qualified Dividends: $595
Capital Gain Distribution: $2401
1099-B: $4,642
No, you cannot use Form 8814 because your daughter has capital gains reported on Form 1099-B. The only capital gains you can report on 8814 are those distributed by mutual funds and reported on 1099-DIV. You will have to file a separate return for your daughter.
Hey David
Thanks so much for the reply.
I completely understand what you are recommending, and i had a feeling that the answer was going to be filing a return for my daughter.
In past years, i probably filed this incorrect. I thought (incorrectly) that her accounts were linked to my Social Security number. I had been reporting her investment statements under my return (therefore taxing her earnings at my tax rate).
Other than creating a tax disadvantage for myself / her, is there a reason that i cannot continue to file her earnings under my return?