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

[gscheck]

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

[dascpa]

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?

[TaxGuyBill]

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

[gscheck]

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]

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. 

[qbteachmt]

"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.

[gscheck]

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.

[rbynaker]

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.

[sjrcpa]

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