Can I claim a child's custodial account

[mhenergy]

My son is a full time student age 20. He made about $10k in 2016 working summer and part time jobs and had federal withholding. In 2016, I liquidated one of his custodial accounts that was losing money and received a 1099-B showing the loss . I still claim him as my dependent on my 2016 taxes. I know that he needs to file his own return for 2016, but is there any way that I can claim the loss on that particular custodial account on my taxes in order to offset my capital gains?

[MargaretL · Accepted solution]

No, you cannot claim your son's capital gains on your tax return, unfortunately. A capital loss from selling assets in a custodial account cannot be reported on the parents' tax return. Parents can report the income of a child on their tax return in certain situations, but this option is available only when all the child's income is from interest and dividends. Since your child has capital gains or losses, all the child's income (including interest and dividends if he has any) must be reported on a separate tax return for the child and that includes, of course, his capital loss.