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Hello, does anyone have any experience between the benefits of filing a separate child tax return vs including it in the parents' return? It seems form 8814 already has up to $1100 taxed at 10%. Assuming only interest, dividend and capital gains in the child's UTMA and assuming it will not push the parent to a different bracket?
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@ptax255 wrote:
Assuming only interest, dividend and capital gains
Capital gains?
Capital gains (usually on a 1099-B) don't qualify for 8814. Capital Gain Distributions (1099-DIV) do qualify.
I don't have much experience with it, but as you pointed out I think it is supposed to work out the same for income tax. However, the 'extra' income added to the parents' tax return could affect other things, such as reducing (or eliminating) some credits or deductions.
