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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11853
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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My son had stock, I was the custodial person. We changed

Customer Question

My son had stock, I was the custodial person. We changed that last year and we are joint on the stock. We sold some of it. How are taxes paid on this.
JA: PayPal, Debitcard or credit card are all fine.
Customer: Who pays the taxes, he is 32
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: He moved in with me a year ago and has no income. When they look it up, they find it under my social security number, but shows us as co-owners
Submitted: 5 months ago.
Category: Tax
Expert:  Lane replied 5 months ago.

Hi. My name's Lane.

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If you are co-owners, you each report 50% of any gain.

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Capital gain = sales price - basis

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Basis is the purchase price of the stock.

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The tax you each pay will be determined by the OTHER income on your return (and the size of the gain)

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Long-term gains and qualified dividends taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket

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So depending on the size of the gain, your son MAY owe nothing.

Expert:  Lane replied 5 months ago.

The filing threshold for a single filer is is the 6300 standard deduction plus the 4050 personal exemption.

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So if his share of the gain is less than 10350 then he doesn't have enough taxable income to file.

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If it IS over that, then the rate may still be zero, if his TOTAL taxable income is under 36,900 (where ordinary income rates move to 25% and capital gains are taxed at 15%)