I sold I - bond ($10k) which were in my kid's name. How do I file taxes on them? Does the child get exemption? Are there specific forms to be filled out?

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I bond tax question

by Mrxyz » Sat Sep 07, 2013 6:35 pm

Hi
I sold I - bond ($10k) which were in my kid's name. How do I file taxes on them? Does the child get exemption? Are there specific forms to be filled out?

Thanks

Mrxyz

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Re: I bond tax question

by Ice-9 » Sat Sep 07, 2013 7:08 pm

According to IRS Publication 929, if your dependent child earned more than $950 interest in a tax year, (s)he must file.

However, apparently you may be able to elect to report the unearned income on your return if you meet the criteria:

Election to report child's unearned income on parent's return. A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. See Parent's Election To Report Child's Interest and Dividends in Part 2. If the parent makes this election, the child does not have to file a return.

If you were to elect to report your child's interest income on your return, you would need form 8814.

Ice-9

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Re: I bond tax question

by Mrxyz » Sun Sep 08, 2013 8:33 am

Ice-9 wrote:According to IRS Publication 929, if your dependent child earned more than $950 interest in a tax year, (s)he must file.

However, apparently you may be able to elect to report the unearned income on your return if you meet the criteria:

Election to report child's unearned income on parent's return. A parent of a child under age 19 (or under age 24 if a full-time student) may be able to elect to include the child's interest and dividend income on the parent's return. See Parent's Election To Report Child's Interest and Dividends in Part 2. If the parent makes this election, the child does not have to file a return.

If you were to elect to report your child's interest income on your return, you would need form 8814.

Thanks for the information.
So, the interest was less than $950. So, I need to report it under my taxes and not under the child's taxes.

Thanks

Mrxyz

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Joined: 29 Feb 2012

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Re: I bond tax question

by pshonore » Sun Sep 08, 2013 9:13 am

Assuming the interest was less than $950, your child has no filing requirement and owes no tax. Why would you include it on your return?

pshonore

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Re: I bond tax question

by Mrxyz » Sun Sep 08, 2013 11:26 am

pshonore wrote:Assuming the interest was less than $950, your child has no filing requirement and owes no tax. Why would you include it on your return?

Actually, that's the question I have. But thanks for stating it way better. Ice-9 mentions that I can elect to report the income of my child. But, is it necessary to do so or is it voluntary if the income is below $950?

Mrxyz

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Re: I bond tax question

by Ice-9 » Sun Sep 08, 2013 11:42 am

Everything I've read says you must file if unearned income is over $950. It seems like if unearned income is lower (and if your child doesn't have to file for some other reason) then you would only choose to file if your child were due a refund.

From the advice on Nolo's page http://www.nolo.com/legal-encyclopedia/ ... eturn.html

Should a Return Be Filed Even If Not Required?

Even if your child does not meet any of the filing requirements discussed, he or she should file a tax return if (1) income tax was withheld from his or her income, or (2) he or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, refundable credit for prior year minimum tax, first-time homebuyer credit, adoption credit, or refundable American opportunity education credit. See the tax return instructions to find out who qualifies for these credits.

By filing a return, your child can get a refund.

Edit to add: Good short video from TurboTax on this page https://turbotax.intuit.com/tax-tools/t ... 14501.html

Ice-9

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Re: I bond tax question

by Mrxyz » Sun Sep 08, 2013 10:06 pm

Ice-9 wrote:Everything I've read says you must file if unearned income is over $950. It seems like if unearned income is lower (and if your child doesn't have to file for some other reason) then you would only choose to file if your child were due a refund.

From the advice on Nolo's page http://www.nolo.com/legal-encyclopedia/ ... eturn.html

Should a Return Be Filed Even If Not Required?

Even if your child does not meet any of the filing requirements discussed, he or she should file a tax return if (1) income tax was withheld from his or her income, or (2) he or she qualifies for the earned income credit, additional child tax credit, health coverage tax credit, refundable credit for prior year minimum tax, first-time homebuyer credit, adoption credit, or refundable American opportunity education credit. See the tax return instructions to find out who qualifies for these credits.

By filing a return, your child can get a refund.

Edit to add: Good short video from TurboTax on this page https://turbotax.intuit.com/tax-tools/t ... 14501.html

Wow!

Love this forum and all of you wonderful members!!
What a complete answer, with all links attached!
THANKS