File tax return for child's inherited stock? | Southern MN

Q:  Our daughter inherited some stock from her grandparents that are paying her really good dividends and capital gains each year.  Do we have to pay tax on that?

A:  She would have to file a tax return claiming the income if the amount is over $2,100.  If that was her only income and it was less than $2,100, she would not be required to file.  But be warned, she may be subject to kiddie tax when the amount is greater than 2,100.  This is when the tax rate that she pays tax on is based on the parent’s tax rate.  Taxes, investments, business and maybe a little more.  Sandy Flom, Faribault CPA.