Possi Posted March 18, 2018 Report Posted March 18, 2018 When qualifying a parent as a dependent, discussing gross income, does the basis count against the sale of stock? I believe I am looking for "taxable" gross income, knowing certain income (Sch E and C, basically) cannot be reduced by expenses. Did I just answer my own question? 1099B stock sales will require Momma to file a return, but the net income was less than $400. DIV $597 and Cap Gains were $1631. So, am I correct to file a return for Momma and don't let her claim her own exemption, but let the kids claim her? They do support her. I don't know why this is so hard for me. I've been researching this! You'd think this was my first rodeo. Quote
jklcpa Posted March 18, 2018 Report Posted March 18, 2018 Something for your file - Cornell Law's online code, sec 152(d)(1)(B) reads as "Qualifying Relative...whose gross income for the calendar year in which such taxable year begins is less than the exemption amount (as defined in sec 151(d))." Gross income had this pop up (can't link to that directly) that says this: Quote gross income (ii)For purposes of clause (i), in the case of 1 or more sales or other dispositions of stock or securities, the term “gross income” includes only the excess of— (I)the net short-term capital gain from such sales or dispositions, over (II)the net long-term capital loss from such sales or dispositions. (C) (i)The aggregate amount which may be reported as dividends under subparagraph (A) shall not exceed the aggregate dividends received by the company for the taxable year. (ii)The aggregate amount which may be reported as qualified dividend income under subparagraph (B) shall not exceed the sum of— (I)the qualified dividend income of the company for the taxable year, and (II)the amount of any earnings and profits which were distributed by the company for such taxable year and accumulated in a taxable year with respect to which this part did not apply. 3 Quote
Possi Posted March 18, 2018 Author Report Posted March 18, 2018 Thanks, Judy! I searched and searched. I appreciate this. Quote
Catherine Posted March 19, 2018 Report Posted March 19, 2018 Judy just about always comes up with the perfect cite. 5 Quote
Richcpaman Posted March 19, 2018 Report Posted March 19, 2018 What about Momma's Social Security? Rich Quote
Abby Normal Posted March 19, 2018 Report Posted March 19, 2018 26 minutes ago, Richcpaman said: What about Momma's Social Security? Rich Social Security doesn't count towards income when claiming a dependent. It's a carve out. Quote
jklcpa Posted March 19, 2018 Report Posted March 19, 2018 23 minutes ago, Abby Normal said: Social Security doesn't count towards income when claiming a dependent. It's a carve out. Only for the portion that isn't taxed. If any of momma's benefits are taxable, that part of her SS benefits is included in gross income. 3 Quote
Richcpaman Posted March 19, 2018 Report Posted March 19, 2018 1 hour ago, jklcpa said: Only for the portion that isn't taxed. If any of momma's benefits are taxable, that part of her SS benefits is included in gross income. Just Checkin' ya! Rich Quote
Abby Normal Posted March 19, 2018 Report Posted March 19, 2018 (edited) Yeah, but for them to be a dependent, their other income has to be so low that NONE of the Social Security will end up being taxable. Edited March 19, 2018 by jklcpa added the missing word 2 Quote
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