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Financial Planning / Tax Strategies


Subject:  Re: Custodial Account/Capital Gain Date:  9/27/2012  12:47 PM
Author:  ptheland Number:  116681 of 127534

The next 950 is taxed at the childs rate - is that 0% or 10%?

Its in the 10% bracket for ordinary income. But since it's a LTCG, it gets taxed at the appropriate LTCG rate of 0%. Clear as mud?

Would this then be taxed at the parents capital gain rate - either 0% if the parents taxable income is less than 70,700 or 15% if the parents taxable income is over 70,700 or a combination of 0% for part and 15% for part if it takes them over 70,700?

You've got the right process. I didn't check the 70,700 figure itself, but I think it's in the right ballpark for the beginning of the 28% bracket for a married couple filing jointly.

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