Is it necessary to report capital gains/losses in accounts held for minors in an UTMA account, if the child would otherwise not be required to file? Here's the situation: The taxpayers 2 children, ages 15 & 12, both have capital losses from shares of mutual funds sold. (I believe the proceeds were transferred into a 529 plan) They have no earned income, and unearned income of only a few hundred each. Is it necessary to file a return to report these sales? I don't believe the parent's can report the losses on their own return, correct?
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If the gross amount of the sale of securities would cause a filing requirement, then yes. The sale of $1000 in mutual funds, even though it's at a loss, will look like taxable income to the IRS. That way you have a record of the carry forward loss as well.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de Tocqueville -
Thanks Dave,
I'm going to file the returns for the kids to preserve the capital losses to be used in the future.Comment
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