Form 8814. When child has stock sales, but profit is under $2,200. Child has dividends of over $2,200 in addition to the stock sales

[DTNY07]

I have a client with 4 children (all under age 12).  Each of the 4 kids have investments accounts, where dividends are more than $2,200.  Stock gains of over $1,000, but less than $2,200

I know on Form 8814 (for the parents to claim the income), it can only be interest or dividends, but not stock sales.   

My question is that since the stock sales are less than $2,200, is it that the parents can just claim the dividends for each of the 4 kids through Form 8814.  Because the stock sales are below $2,200, then it wouldn't be reported.  Or is it since there are stock sales (regardless of the loss or profit), can't use Form 8814 under any circumstance.  Would have to then file tax returns for each of the 4 children with Form 8615

The parents tax rate is definitely higher but they would rather just report it on their tax return if possible

In the 21 years I have been doing this, have never had any kiddie tax return.  Which is why I am asking this.

Thanks for any help

[TaxGuyBill · Accepted solution]

The kids need to file their own tax returns with Form 8615.

Their total unearned income is over $2200, so you can't just ignore the stock sales when reporting their income.

[DTNY07]

Thanks for the info.  I figured that was the case, but doesn't make sense to me why stock can't just be on the parents return as well.  Which is why i asked