Mother has a toddler. She sets up a custodial account for her son. She is the custodian. Account earns: $2043 cap. Gains; $263 divds; $171 ?other distributions.? The total is $2477. The account is under the child?s SS number.
My question: Does she have to file a tax return for the child?
Mel
Yes. If the only income were dividends and interest, the parent could choose to report the child's income on her return. But if there were capital gains, whether by sales or capital gain distributions, the child must file a return (assuming the minimum filing thresholds are met).
Ira Smilovitz, EA Leonia, NJ
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