Form 1099 Interest Income

[rfk]

I know that it is probably not the case, but to be sure that I am not missing something (probably need to wake up):

Mother is custodian; has account for child; interest income paid in child's social number.

I am thinking that parent does not have to report interest income of $15 and some change on parents' return? I do not know why I need to check this with the forum, but want to be sure that they need not report the monies. Child has no reporting requirements with regard to money earned in 2009 - too little.

Thanks.

rfk

[Uncle Sam]

Form 1099

Don't confuse the child's $ 15 (if that's the ONLY INCOME the child received) where the child does not even have to file - with the parent reporting the child's income on the parents' return due to Kiddie Tax requirements (child has unearned income over $ 1800 (I believe) - where the amount over the limit is reported at the parents' marginal rate.

[FEDUKE404]

Income goes to tax return for child

For the child, income is income regardless of whether it was "reported to the IRS."

Kinda like the folks who wish to ignore $595 of self-employment income since no Form 1099-MISC was (likely) issued.

For this situation, unless there is a kiddie tax issue (involving child's investment income) there is no concern for the parent to pursue things.

Of course, if the child is already filing an income tax return (summer job etc) then the interest income should go on the child's tax return.

One other issue: If the account were truly the "child's" account but the bank reported things with the Soc Sec number of a parent, then a nominee distribution could be used on the parents' return. For $15 of income, that is hardly worth the effort and also does not appear to be the case here.

FE

[rfk]

No reporting requirements

So there basically is no reporting requirement, given that the child had earned and investment income of less than that required to file.

Thanks.

rfk