Appreciate Anne for her input. Unfortunately - Form 8615 should never have been an issue in this case since the taxpayer was over age 18 - for tax years before 2008.
Please see IRS pub 929 page 15 - http://www.irs.gov/pub/irs-pdf/p929.pdf
When Form 8615 must be filed. Form 8615 must be filed for a child if all of the following statements are true.
1.The child's investment income was more than $1,900.
2.The child is required to file a return for 2010.
3.The child either:
a.Was under age 18 at the end of the year,
b.Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or
c.Was a full-time student over age 18 and under age 24 at the end of the year and did not have earned income that was more than half of his or her support.
4.At least one of the child's parents was alive at the end of 2010.
5.The child does not file a joint return for 2010.
Since the child was a full-time student whose earned income wasn´t more than half of her support - the form 8615 is required.
The tax law was changed according to the Small Business and Work Opportunity Tax Act of 2007.