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Drop kids deduction if you're under AMT ?
Old 04-06-2008, 07:28 PM   #1
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Drop kids deduction if you're under AMT ?

Is it ever advantageous to not claim your kids as deductions ?

What if you are caught with AMT, and your kid under 18 has investment income over $1,700 ?

There's form 8615 -- which asks for parents income - above a certain level, the income gets taxed at parents rate.

If you dropped your kid as a deduction, the parent's tax rate might not get any better -- but the kid might avoid 8615 - and pay less tax ?

Appreciate any thoughts.
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Old 04-07-2008, 06:13 AM   #2
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Why do you think the kid might avoid 8615? Don't know much about this but a quick reading of the tests for 8615 doesn't suggest that you could avoid it. Try asking here in the AMT forum.
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Old 04-07-2008, 07:22 AM   #3
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All I know is what my parent's did for me, we went the courthouse and had me emancipated once I was 18. So as far as the government is concerned, I have no parent's.

The advantages of this was that on taxes and FAFSA, I did not have to report an parental income.

The point was that my dad is a dentist and I was not going to get any grants for college with his income showing up.
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Old 04-07-2008, 08:00 AM   #4
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Off topic a bit, but if a child gets emancipated, it has to occur before age 18. Plus, most courts are not inclined to allow emancipation unless something bad is going on. Also, FAFSA does not recognize the status: 5 Bizarre Things You didn’t Know about FAFSA | FAFSA Financial Aid Form News Blog
and FAFSA Questions: What defines a dependent student

As far as form 8615, I agree with kaneohe. I don't see how the form can be avoided, but you might try the Fairmark forum.

No more lawyer stuff, no more political stuff, so no more CYA

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Old 04-07-2008, 10:04 AM   #5
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Thanks - I'll check over at Fairmark.

Martha: cool icon !

I'm not about to emancipate my kid - in fact, if there was "magic dust" to stop him from growing up, I'd apply it liberally...

I was just theorizing that if a minor is not claimed on parents return then maybe there's no "hooks" from minor's tax return to parents. But this might not be true.

I have another kid over 18 - and their income is taxed at their rates - Turbotax did not ask for parents income or present the need for 8615.

Thanks !
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