Publication 929 - Tax Rules For Children And Dependents

Line 13 (Child’s Share of Tentative

on line 3 of this worksheet Schedule J (in-

Table or Tax Computation Worksheet (or

stead of the amount on Form 8615, line 8)

Tax)

Schedule J, if applicable) to figure this tax.

in step (1).

•

If line 14 does include any net capital gain

If an amount is entered on line 7, multiply line 11

5. On lines 5 through 16, enter the amounts

or qualified dividends, use the Qualified

by the decimal on line 12b and enter the result

from the parent’s Schedule J, lines 5

Dividends and Capital Gain Tax Work-

on line 13. This is the child’s share of the tenta-

through 16.

sheet to figure this tax. For details, see the

tive tax.

instructions for Form 8615, line 15. How-

6. Complete line 17 following the Schedule J

ever, if the child has 28% rate gain or

Step 3. Figuring the

instructions.

unrecaptured section 1250 gain, use the

Child’s Tax

7. On lines 18 through 21, enter the amounts

Schedule D Tax Worksheet. (But use

from the parent’s Schedule J, lines 18

Schedule J instead, if it applies.)

The final step in figuring a child’s tax using Form

through 21.

8615 is to determine the larger of:

Using the Schedule D Tax Worksheet for line

8. Complete line 22 following the Schedule J

15 tax. Use the Schedule D Tax Worksheet in

instructions.

1. The total of:

the Schedule D instructions to figure the line 15

Enter the amount from line 22 of this worksheet

a. The child’s share of the tentative tax

tax on Form 8615 if the child has unrecaptured

Schedule J on Form 8615, line 9, and check the

based on the parent’s tax rate, plus

section 1250 gain or 28% rate gain. Do not

box on that line.

attach this Schedule D Tax Worksheet to the

b. The tax on the child’s taxable income in

child’s return.

excess of net investment income, fig-

Complete this Schedule D Tax Worksheet as

Line 10 (Parent’s Tax)

ured at the child’s tax rate, or

follows.

Enter on line 10 the amount from the parent’s

2. The tax on the child’s taxable income, fig-

1. On line 1, enter the amount from Form

Form 1040, line 44; Form 1040A, line 28 (minus

ured at the child’s tax rate.

8615, line 14.

any alternative minimum tax); Form 1040EZ,

This is the child’s tax. It is figured on Form

line 11; Form 1040NR, line 41; or Form

2. On line 2, enter the qualified dividends in-

8615, lines 14 through 18.

1040NR-EZ, line 15. Do not include the tax, if

cluded on Form 8615, line 14. (See the

any, from Form 4972 or Form 8814.

earlier discussion for line 14.)

If the parent files Form 2555 or 2555-EZ,

Line 14 (Child’s Taxable Income in

3. Leave lines 3 through 5 blank.

enter the amount from line 8 of the parent’s

Excess of Net Investment Income)

Foreign Earned Income Tax Worksheet (in the

4. Enter the amount from line 2 on line 6.

Form 1040 instructions), instead of the parent’s

If lines 4 and 5 of Form 8615 are the same, the

5. On line 7, enter the net capital gain in-

tax from Form 1040, line 44.

child’s taxable income is not more than the

cluded on Form 8615, line 14. (See the

child’s net investment income. Enter zero on

earlier discussion for line 14.)

lines 14 and 15, and go to line 16. Also skip the

Line 11 (Tentative Tax)

6. Skip line 8.

rest of this discussion and the discussion for line

15 that follows.

7. Enter the amount from line 7 on line 9.

Subtract line 10 from line 9 and enter the result

on this line. This is the tentative tax.

If lines 4 and 5 are not the same, subtract line

8. Complete line 10, following the worksheet

If line 7 is blank, skip lines 12a and 12b and

5 from line 4 and enter the result on line 14.

instructions.

enter the amount from line 11 on line 13. Also

Then, before completing line 15, you must deter-

9. On line 11, enter zero if the child has no

skip the discussion for lines 12a and 12b that

mine the amount of net capital gain and qualified

28% rate gain (Schedule D, line 18) or

follows.

dividends, if any, included on line 14.

unrecaptured section 1250 gain (Schedule

D, line 19). Otherwise, see Worksheet 1

Net capital gain and qualified dividends on

Lines 12a and 12b (Dividing the

for Line 11 of the Schedule D Tax Work-

line 14. If the child does not have any net

Tentative Tax)

sheet – 28% Rate Gain (Line 9 Tax) and

capital gain or qualified dividends, the amount of

Worksheet 2 for Line 11 of the Schedule D

the net capital gain and qualified dividends in-

If an amount is entered on line 7, divide the

Tax Worksheet – Unrecaptured Section

cluded on line 14 is zero.

tentative tax shown on line 11 among the chil-

1250 Gain (Line 9 Tax) under Using the

If the child has net capital gain, the amount of

dren according to each child’s share of the total

Schedule D Tax Worksheet for line 9 tax,

net capital gain included on line 14 is the amount

net investment income. This is done on lines

earlier. For each worksheet you complete,

from line 2 of the child’s completed Line 5 Work-

12a, 12b, and 13. Add the amount on line 7 to

subtract line 5 of that worksheet from line 1

sheet minus the amount from the last line of that

the amount on line 5 and enter the total on line

of that worksheet, and include the result on

worksheet. (See the earlier discussion for line 8

12a. Divide the amount on line 5 by the amount

line 11 of this worksheet.

of Form 8615.)

on line 12a and enter the result, as a decimal, on

10. Complete lines 12 through 37, following

If the child has qualified dividends, the

line 12b.

the worksheet instructions. Use the child’s

amount of qualified dividends included on line

filing status to complete lines 15, 34, and

Example. In the earlier example under Line

14 is the amount from line 1 of the child’s com-

36.

7 (Net Investment Income of Other Children),

pleted Line 5 Worksheet minus the amount from

Sharon’s Form 8615 shows $1,600 on line 7.

the next to the last line of that worksheet. (See

Enter the amount from line 37 of this Schedule D

The amount entered on line 12a is $2,400, the

the earlier discussion of line 8 of Form 8615.)

Tax Worksheet on Form 8615, line 15, and

total of the amounts on lines 5 and 7 ($800 +

check the box on that line.

$1,600). The decimal on line 12b is .333, figured

Line 15 (Tax on Child’s Taxable

as follows and rounded to three places.

Using Schedule J for line 15 tax. If Schedule

Income in Excess of Net

J applies, use it as a worksheet to figure the tax

Investment Income)

to enter on Form 8615, line 15. On line 1 of this

$800

worksheet, enter the amount from Form 8615,

= .333

Figure the tax on the amount on line 14 using the

line 14. Complete lines 2 through 22 following

$2,400

Tax Table, the Tax Computation Worksheet, the

the Schedule J instructions. Use the child’s filing

Qualified Dividends and Capital Gain Tax Work-

status to complete lines 4, 8, 12, and 16.

sheet, the Schedule D Tax Worksheet, or

Enter the amount from line 22 of this work-

Schedule J (Form 1040), as follows.

sheet Schedule J, on Form 8615, line 15, and

•

If line 14 does not include any net capital

check the box on that line. Do not attach this

gain or qualified dividends, use the Tax

worksheet to the child’s return.

Publication 929 (2006)

Page 15

Publication 929 - Tax Rules For Children And Dependents - 2006 Page 15

Related Articles

Related forms

Related Categories