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I have two kids with custodial accounts and I recently made some changes to the accounts and generated some Capital Gains.


I am married and filing jointly.

Irrelevant. Your kids will file their own returns for the activity in the custodial accounts.

I am trying to see how these will be taxed. I will give one example and figure out my second son. I generated LTCG of $6439.62 and STCG of $232.71. In addition he has a Capital Loss Carryover of $610.

The current year transactions will start on Form 8949 and flow through to his schedule D, where the capital loss carryover will join the party.

He will be 17 this year and as of right now he has no other income - he may get a part time job after football season and may have a few hundred dollars of income.

Then it sounds like may have no tax. His standard deduction will cover the STCG (just barely), and the long term gain will be taxed in a 0% bracket. If he does work and have a few hundred dollars, that will also be covered by his standard deduction.

Thank you very much for the help.

You're welcome.

And be aware that I've only commented on Federal taxes. If you are in a state with an income tax, he may or may not have to pay some state tax.

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