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Ira,
Thanks - I will ask my question again, however, you've posed another question that goes along with this.

I'll restate the facts first:
Child's income
One 1099-B is $975 with a basis of $775. Gains ST-$100, LT $100
Second 1099-B is $500 with a basis of $1500 - long term loss $1000
DIV income is $50.

My original question: I was presuming that he is not required to file a return because he did not have $750 in income. Therefore, his $200 capital gain would be nontaxable if I were to factor out the loss completely hypothetically assuming it did not occur.

But, factoring IN the loss, if I fill out the Sch D, the $1000 loss is reduced by the $200 in gains (which it should) resulting in a carryover of $800. If each of the next few years also result in gains of a few hundred dollars only and I keep reducing the carryover each year by those small amounts, then I will have used up all of the original $1000 loss with small annual amounts that were never taxable in their respective years.

Is this what would really happen or am I going wrong somewhere.

Also, perhaps I am misunderstanding his requirement to file. I thought the $750 in income referred to AGI. But you made a reference that if 1099-B reported $1000 with a basis of $200 then he would be required to file.

I hope this makes more sense. Thanks for your help.


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