Janitor Bob Posted April 4, 2012 Report Share Posted April 4, 2012 My client is the custodian of the brokerage account for her young grandson. Client received a 1098-B (gross proceeds $1,078.98). Recipient's name is my client, Custodian FBO "grandson's name". Recipient's identification number is grandson's SSN. Does my client's grandson need to have a return prepared for him since this unearned income is over $950? Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted April 4, 2012 Report Share Posted April 4, 2012 My client is the custodian of the brokerage account for her young grandson. Client received a 1098-B (gross proceeds $1,078.98). Recipient's name is my client, Custodian FBO "grandson's name". Recipient's identification number is grandson's SSN. Does my client's grandson need to have a return prepared for him since this unearned income is over $950? Yes. After you enter basis, his earnings most likely will be near $0, so no tax consequences to the child or the parents. If you do not file the return, an CP2000 will be in the grandson's future. Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted April 4, 2012 Author Report Share Posted April 4, 2012 Thanks...that's what I figured. Quote Link to comment Share on other sites More sharing options...
Randall Posted April 4, 2012 Report Share Posted April 4, 2012 And if a loss, carry forward. Inform grandparents, parents, to keep copies. 1 Quote Link to comment Share on other sites More sharing options...
mcb39 Posted April 4, 2012 Report Share Posted April 4, 2012 Thanks....One of my clients' minor children received a K-1 with income from a Trust and I had no clue what to do with it. Is that the same situation.? , trust set up by Grandparents. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted April 4, 2012 Report Share Posted April 4, 2012 Yep, child files a tax return. 1 Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted April 4, 2012 Author Report Share Posted April 4, 2012 this was not a "covered" sale, so no cost is stated on the 1099-B.....Should I tell grandmother to contact the broker for cost information? Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted April 5, 2012 Report Share Posted April 5, 2012 this was not a "covered" sale, so no cost is stated on the 1099-B.....Should I tell grandmother to contact the broker for cost information? YES. The broker get paid every year the investment is in their company, so it is (in my mind) the least the broker can do for their paying customer. These brokers act like providing basis is something new.... Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted April 16, 2012 Author Report Share Posted April 16, 2012 Received cost information from broker today. Gross proceeds were $1,079, but cost was $1,087....-$8. So does child need to file a return based on gross proceeds or not since income not above $950..excuse the dumb question, but I do not want child to get a letter for non-filing. and I am confused as to what they consider gross income. The tax side of me believes that since AGI is less than $950, No filing required, The bookkeeper side of me sees gross proceeds of $1,1079 as gross income Quote Link to comment Share on other sites More sharing options...
jasdlm Posted April 16, 2012 Report Share Posted April 16, 2012 In my opinion, you still need to file . . . all IRS has is $1,079, so as far as they are concerned until you tell them otherwise, income is $1,079. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted April 17, 2012 Report Share Posted April 17, 2012 I stand on my original statement, based on experience. Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted April 17, 2012 Author Report Share Posted April 17, 2012 Thanks....returns have been prepared....turns out there are 4 kids...all with the same gross proceeds....so 4 returns to file Quote Link to comment Share on other sites More sharing options...
Lion EA Posted April 17, 2012 Report Share Posted April 17, 2012 And, four returns to charge for! Quote Link to comment Share on other sites More sharing options...
Kea Posted April 17, 2012 Report Share Posted April 17, 2012 At least they are pretty easy & can be done on auto-pilot! Quote Link to comment Share on other sites More sharing options...
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