Level 2

Question

Student age 20 does Crypto investing and had S/T gains over $85000

Forum|Forum|4 years ago
April 14, 2022
4 replies
11 views

I have a client who is a student and this year did alot of Crypto transactions and ultimately had over $85000 in s/t capital gains. In theory the kiddie tax would come into play but this is sort of his job as well as being a student. He only had $2500 in W-2 wages. can you just not file the kiddie tax and file as single. The gains in theory cover half of his support

ProSeries Professional

This topic has been closed for replies.

dascpa

Level 11

Did he actually pay for his support, not could he/she have? If sitting in his crypto account or reinvested and not spent on support then obviously no. I would be surprised to hear he/she paid for college, housing, food, etc. as per the listing the IRS has for determining support.

I'm really shocked at your $85k. I've had a ton of client crypto this year and hardly anybody made any real money. Curious, what's the kid's major? Finance or Art History?

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gscheckAuthor

Level 2

He is finance. I have a 113 page schedule D from Crypto transactions. he trades every day multiple times a day and i am thinking it is really his "job" he did not pay for all his tuition, but some and used some to purchase a moped/scooter to get around campus. I just think it is crazy that kiddie tax should apply

dascpa

Level 11

i previously posted I had one over 18,000 pages with 270,000+ transactions. Far exceeded IRS attachment file size limit so had to borrow a friends software to create the pdf file for attachment. Thought about mailing the 18,000 pages but that would be my entire tax season profit.

T

TaxGuyBill

Level 15

If he under age 24 and was considered a full-time student, the Kiddie Tax applies to him.

qbteachmt

Level 15

"but this is sort of his job"

But it's not. It's not Earned Income.

"He only had $2500 in W-2 wages."

There's the Job.

Don't yell at us; we're volunteers

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gscheckAuthor

Level 2

I understand your comments. Just trying to see if there is a way to avoid the kiddie tax. Parents are in high tax bracket so it is substantial difference in tax owed.

sjrcpa

Level 15

In addition to learning how to make money; now he learns the tax consequences of making money.

The more I know the more I don’t know.

rbynaker

Level 13

Is support relevant for a student under 24? To get out of kiddie tax he needs earned income >50% of his support. We don't have all of the facts but my guess is kiddie tax applies here.

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