Dependent's K-1 & OK-NR

[Kea]

Client sent me info for his extension. He mentions that his brother told him that his daughter had $3000 in investment income for 2009. I figure this would be kiddie tax area. Then he sends me the K-1 for the 17 year old daughter. It's an irrevocable trust that paid $3509 in Ordinary Business Income. Also includes OK K-1.

From what I see, I file the federal K-1 for the daughter the same as any K-1. Her standard deduction is limited to $950, but everything else proceeds normally. (Right?)

For OK, I don't see any reduction for the standard deduction for being a dependent. Is that true? Since her OK income is over $1000, it has to be filed, but with no tax due.

I just want to make sure I'm not missing some "exceptions."

Thanks!

[jainen]

>>$3509 in Ordinary Business Income<<

As she is not conducting the business, earnings from this passive activity are considered investment income for purposes of kiddie tax.

[Kea]

How do you put the dependent's K-1 on the parents' return?

[jainen]

>>How do you put the dependent's K-1 on the parents' return? <<

You don't. The child must file a separate return unless her income is exclusively from interest, dividends, and capital gain distributions.

[Kea]

I have been doing it as her own return (primarily because I didn't see any way to add it to her parents'). Her only income is this K-1 & some bank interest. I've never done a K-1 on a dependent's return & just wanted to make sure there were no different rules (compared to doing it on a non-dependent return).

I also wanted to make sure there was not a separate Oklahoma standard deduction for someone who is a dependent on someone else's return.

Thanks.

[jainen]

>>make sure there was not a separate Oklahoma standard deduction for someone who is a dependent<<

The applicable standard deduction amounts are printed right on the NR form itself. The instructions for the resident return spell it out even further, "Note: You qualify for the Oklahoma standard deduction even when claimed as a dependent on another return."

[Kea]

Thanks so much.

[jainen]

>>Thanks so much.<<

You are welcome. But are you thanking me for putting something in quotes, or for telling you where you can find it yourself?

[Kea]

More for where to find it. (Although, I did really appreciate the quote part, too. )

The portion of the instructions I looked at just mentioned the amount per category -- ie single, married, HOH. I did not see the part about "...even when claimed as a dependent..." You answered my question perfectly!!