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My son has a Minor Account which he has had for several years. He will be starting College soon so I am thinking about selling it and putting the money in a more conservative invetment. When I sell it the long Term Capital Gains will be about $6300. He has no earned income. If I were to sell it he would get the standard deduction of $950 (for 2009 at least) and then he would have to pay long term capital gains of $5350. I think I would then have to file Form 8615 - is that right? Would the rate on the long term capital gains be dependent on what my(parents rate) is? If out taxable income was in the 25% bracket then would they be taxed at the rate of 15%? If we were in the 15% bracket would they be 0%?

Assuming he has no other income, he would have a standard deduction of $950. The first $950 of taxable income would be taxed at his LTCG rate, which is 0%. The remaining $4400 of LTCG would be taxed at your LTCG rate: 0%, 15%, or a blend of the two depending on the composition and amount of your taxable income.

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