UTMA 1099-B reporting with Form 8814 - avoiding double taxation in TurboTax for kiddie tax

Thanks for the explanation. I have a similar situation but I'm confused about the kiddie tax part. If my kid's investment income is over $2,200, do I still use Form 8814 or do they need to file their own return? Does this change how I handle the 1099-Bs in TurboTax?

Form 8814 can only be used if your child's interest, dividends, and other investment income total less than $11,000. If your child's investment income exceeds $2,200, they may be subject to the kiddie tax, which means some of their income could be taxed at your (presumably higher) tax rate. If the investment income is over $2,200 but under $11,000, you can still use Form 8814, but that portion above $2,200 may be subject to your tax rate. If it's over $11,000, your child must file their own return. In that case, you would keep their 1099-Bs separate from your return entirely since you wouldn't be using Form 8814.

Does taxr.ai actually work with investment forms like 1099-B? My situation is complicated because I have multiple UTMA accounts for three kids with different types of investments. Can it handle that level of complexity?

I'm skeptical about these tax tools. How exactly does it tell you what to do in TurboTax? Does it integrate somehow or just give general advice? My UTMA situation is particularly complex with some accounts having losses and others gains.

Yes, it works with all investment forms including 1099-B, 1099-DIV, and others. I uploaded statements from multiple UTMA accounts for both my kids and it handled everything perfectly. It even separated out which transactions needed to be reported where. It doesn't directly integrate with TurboTax, but it gives you specific instructions for your situation. In my case, it provided step-by-step guidance explaining exactly which forms in TurboTax I needed to complete and which 1099-Bs to include or exclude. For complex situations with mixed gains and losses, it actually breaks down which specific transactions need to be handled differently.

How does this Claimyr thing actually work? I've been trying to reach the IRS about a similar UTMA issue for weeks. Do they somehow get you to the front of the IRS phone queue? That seems impossible given how backed up the IRS is.

This sounds like a scam. There's no way to skip the IRS phone queue. I've worked with tax issues for years and everyone has to wait. I doubt they actually got you through to a real IRS agent that quickly. Probably just connected you to some random tax advisor pretending to be IRS.

It's a callback service that essentially waits on hold with the IRS for you. When they reach a representative, they call you to join the call. It's not skipping the line - they're just waiting on your behalf so you don't have to listen to hold music for hours. They don't pretend to be the IRS - they're very clear about being a third-party service. When I used it, I was connected to an actual IRS employee who verified my identity and everything. I confirmed it was legitimate because the agent had access to my previous tax filings and UTMA information that only the IRS would have. The whole process was recorded too, which gave me documentation of the advice I received.

Wait, I thought the age limit was 18? My daughter just turned 18 in December - does that mean I can't use Form 8814 for her UTMA accounts? I'm already halfway through the TurboTax process and didn't realize there might be an age issue.

The cutoff is generally the year your child turns 18, with some exceptions for full-time students under 24. Since your daughter turned 18 in December, that means for this tax year, she was under 18 for most of the year, but was 18 by December 31. Unfortunately, what matters is the age at the end of the tax year, so she would no longer qualify for the Form 8814 election. You'll need to file a separate return for her. It's one of those annoying technicalities, but IRS Publication 929 clarifies this. I made the same mistake last year and had to redo everything.

I had the same issue last year. For transactions where basis isn't reported to the IRS, you'll need to enter the cost basis manually whether you're filing separately or using Form 8814. The UTMA custodian should have records of the original purchase prices, but if not, you'll need to contact the brokerage for historical purchase information. TurboTax has a section where you can enter this missing information.

This is exactly the comprehensive guidance I was looking for! Thank you for breaking down all the key points. I just double-checked and both my kids are 16 and 14, so definitely eligible for Form 8814. Their combined investment income is around $4,500, so well under the $11,000 limit. I'm particularly glad you mentioned the cost basis issue - I just looked at their 1099-Bs and sure enough, several transactions show "basis not reported to IRS." I have the original purchase records from when I set up the UTMAs, so I should be able to handle that part. One follow-up question: when I delete those UTMA 1099-Bs from my main return, will TurboTax give me any warnings about "missing" forms that were imported? I want to make sure I'm not accidentally overlooking something important when I remove them.