Past a low threshold, a child's investment income is taxed at the parent's higher rate. Keeping the child's realized gains under that line preserves their low bracket.
See how it works through one simple example.
Past a low threshold, a child's investment income is taxed at the parent's higher rate.
So you keep the child's realized gains under that line, around the first thirteen hundred fifty dollars.
Done carefully, you harvest gains in the child's low bracket instead of your own high one.
Educational guidance, not tax advice. We confirm every figure and your eligibility before you act.
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The honest version.
A rule taxing a child's investment income above a low threshold at the parent's rate.
Keep the child's realized gains under the threshold each year.
It lets gains be taxed in the child's low bracket instead of your higher one.
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