Kids custodial accounts - filing taxes for carryforward loss and dividend options

Forum|Forum|1 year ago
March 29, 2025
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My kids each have a small custodial account. They made about $70.00 in dividend and interest and lost about $150.00. They each have a single composite1099 form from the brokerage company. They have no earned income. I understand that their income is below what we need to report to the government. I understand that we can choose to report the loss for carry forward purposes.

Can I choose to report the capital losses for carryover purposes on their tax returns and omit the dividend/interest on their tax returns?

Best answer by DianeW777

Yes, you can file to include the capital losses should there be a carryover. Also, you are correct in the respect they are not required to file. If there does happen to be a capital loss carryover you want to file to keep it current and on record for a year they might have income to use it up. For this reason you should file the tax returns for your kids small custodial accounts.

No, you cannot omit the dividend/interest income. All taxable income must be included in the tax return to accurately calculate the capital loss carryover.

DianeW777Answer

No, you cannot omit the dividend/interest income. All taxable income must be included in the tax return to accurately calculate the capital loss carryover.

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