dependent with stock sales

[gman]

Taxpayers college son (age 21) has stock sales totaling 50,000. and cost basis of 53,000. Any problems with parents
claiming the child? Has no w-2 or other income.

[David1980]

Does son provide over half their own support?

[gman]

support

Parents pay for childs apartment and all expenses while he is in college. He just invested his money in to stocks. Finance major...

[gman]

support

Parents pay for childs apartment and all expenses while he is in college. He just invested his money in to stocks. Finance major...

[Roland Slugg]

Any problems with parents claiming the child?

Nope, as long as the parents meet the requirements for claiming their son as a dependent, and he is at least a half-time student.

The son should file his own return anyway, claiming zero exemptions, because he must report the stock sale(s). However, if he has no other income, the $3,000 loss won't be lost, but will carry over in full to next year.

[taxmom34]

big question is

where did this $53,000 come from, a student with no w2 or other income come up with that kind of money? did parents give him the money to invest? that would add to parents amount of support wouldn't it, not the kid?

[ttbtaxes]

Unless the parents gifted it to the kid in prior years and the kid used the proceeds for school in the current year. Then the child would likely not be a dependent.

[Gene V]

where did this $53,000 come from, a student with no w2 or other income come up with that kind of money? did parents give him the money to invest? that would add to parents amount of support wouldn't it, not the kid?

He probably was doing some day trading with very little investment. My 2009 tax return showed my sales on Schedule D was $2,055,553.00 Yes that is 2 millions--My average investment was $18,000. I did lots of day-trading then, as you can see, I'm still doing taxes. wouldn't tell you if I make any profit.