Kiddie Tax and a capital loss carryforward

[Charley in Ohio]

I have a client that is a full-time college student and has a capital loss carryforward from prior years (the only investment income) and some earned income. The carryforward is more than the amount to offset ordinary income ($3,000) and will have some add'l carryforward to 2009. When running the return check, ATX gave me a warning about the kiddie tax applying if there is more than $1,800 of income. When reading the instructions to the Kiddie Tax form (8615), there is no mention about a capital losses (only income). Therefore, I don't think the kiddie tax will apply. Anyone else run into this situation?

Thanks.

Charley

[TAXBILLY]

You are correct.

taxbilly