Form 8516

[VSPeck1]

Indiana What is the name of your state (only U.S. law)? I am using Turbo Tax to prepare my grandson's taxes and it asks about a form 8516. His mother is dead and his grandfather and I claim him as a dependent. The turbo tax application asked for the parent's name and ssn. Is that us since we are claiming him as a dependent?

 

[FlyingRon]

The Kiddie tax is explained here: http://www.irs.gov/taxtopics/tc553.html

I presume the father is still alive. And he's 19 or younger.

 

[VSPeck1]

The Kiddie tax is explained here: http://www.irs.gov/taxtopics/tc553.html

I presume the father is still alive. And he's 19 or younger.

No, I tried to follow your link but got an error. If he is over 19, can I not claim him? And yes his father is alive but the boy has lived with us for the past 6 years. He made little over $2000 last year and is a full time college student.

 

[FlyingRon]

There are 5 tests to see if he is subject to the kiddie tax. I was fishing to see if they applied. Looks like they do. The link should work...I just clicked it.

 

[VSPeck1]

There are 5 tests to see if he is subject to the kiddie tax. I was fishing to see if they applied. Looks like they do. The link should work...I just clicked it.

This publication speaks to unearned income and he doesn't have unearned income unless my support of him counts as unearned income or is it possible that the financial aid/grants that he received to go to school exceeded the tuition that was reported on his 1098T? It looks like the 1098T may not have include both the spring and fall semesters.

 

[FlyingRon]

This publication speaks to unearned income and he doesn't have unearned income unless my support of him counts as unearned income or is it possible that the financial aid/grants that he received to go to school exceeded the tuition that was reported on his 1098T? It looks like the 1098T may not have include both the spring and fall semesters.

Well, then there isn't a problem The whole point of the Kiddie Tax rule was to keep people from putting securities that generate unearned income (bond interest or stock dividends) into their child's name so that it gets taxed at the child's lower rate (kids don't tend to make all that much). If there is no such income from these sources, then even if you filled out the form, you'd find it makes no difference. However, if you don't have any unearned income to speak of, you don't even have to complete the form.