om 8615

Department of the Treasury
Internal Revenue Service

Tax for Children Under Age 14
Who Have Investment Income of More Than $1,000

> See instructions below and on back.

> Attach ONLY to the Child's Form 1040, Form 1040A, or Form 1040NR.

OMB No. 1545-0998

1990

Attachment
Sequence No. 3.

General Instructions

Purpose of Form. For children under age
14, investment income (such as taxable
interest and dividends) over $1,000 is taxed
at the parent's rate if the parent's rate is
higher than the child’s rate

Do not use this form if the child’s
investment income is $1,000 or less.
Instead, figure the tax in the normal manner
‘on the child's income tax return. For
example, if the child had $900 of taxable
interest income and $200 of wages, Form
8615 1s not required to be completed and
the chiid's tax should be figured on Form
1040A using the Tax Table.

If the child’s investment income ts more
than $1,000, use this form to see if any of
the child's investment income is taxed at
the parent's rate and, if so, to figure the

child's tax. For example, if the child had
$1,100 of taxable interest income and
$200 of wages, complete Form 8615 and
attach it to the child’s Form 1040A.

Investment Income. As used on this form,
“investment income” includes ali taxable
income other than earned income as
defined on page 2. It includes income such
as taxable interest, dividends, capital gains,
rents, royalties, etc. It also includes pension
and annuity income and income (other than
earned income) received as the beneficiary
ofa trust.

Who Must File. Generally, Form 8615 must
be fited for any child who was under age 14
on January 1, 1991, and who had more
than $1,000 of investment income. If
neither parent was alive on December 31,

1990, do not use Form 8615. Instead,
figure the child’s tax based on his or her
own rate.

Note: The parent may be able to elect to
report the child's investment income on his
or her return. If the parent makes this
election, the child will not have to file a
return or Form 8615. For more details, see
the Instructions for Form 1040 or Form
1040A, or get Form 8814, Parent's
Election To Report Child’s Interest and
Dividends.

Additional Information. For more
information about the tax on investment
income of children, please get Pub. 929,
Tax Rules for Children and Dependents.

(instructions continue on back.)

Child's name shown on return

Child's social security number

A. Parent's name (first, initial, and last). (Caution: See instructions on back before completing.)

B Parent's social security number

© Parent's filing status (check one):

C2 single, C1 Married filing jointly, (_] Marned filing separately, [_] Head of household, or {_] Quatifying widower)

D_Enter number of exemptions claimed on parent's return. (If the parent's filing status is married filing separately, see the instructions.) > [__]

step |

Figure child's net investment income

1 Enter the child's investment income, such as taxable interest and dividend income (see | the
instructions). (If this amount is $1,000 or less, stop here; do not file this form.) . woe 1
2. Ifthe child DID NOT itemize deductions on Schedule A Form 1040 or Form O4ONR) | enter $y 000. If
the child ITEMIZED deductions, see the instructions 2
3 Subtract the amount on line 2 from the amount on line 1. Enter the result. Wt zero or less, ‘top here; do
not complete the rest of this form but ATTACH it to the child's return.) . . 3
3 Enter the child's taxable income (from Form 1040, line 37; Form 1040A, line 22; or Form LO4ONR, line rea). 4
Compare the amounts on lines 3 and 4. Enter the smaller of the two amounts here... _> 5
step fj Figure tentative tax based on the tax rate of the parent listed above
6 Enter the parent's taxable income (from Form 1040, line 37; Form 1040A, line 22; Form 1040EZ, line
5; or Form 1O40NR, line 35). But if the parent transferred property to a trust, see the instructions 6
7 Enter the total, if any, of the net investment income from Forms 8615, line 5, of ALL OTHER children of
the parent. (Do not include the amount on line 5 above.) 7
8 Add the amounts on lines 5, 6, and 7. Enter the total 8
9 Tax on the amount on line 8 based on the parent's filing status an 9
10 Enter the parent's tax (rom F Form 1040, line 38; Form 1040A, line 23; Form 1 104082, line 7; or Form
1O40NR, line 36). . 10
11 Subtract the amount on line 10 from the amount on line 9. Enter the result. t. (fn no amount ts entered on
line 7, enter the amount from line 11 on line 13; skip lines 12a and 12b.) . : a 11
12a Add the amounts on lines 5 and 7. Enter the total . Ua
Divide the amount on line 5 by the amount on line 12a, Enter the result as a decimal (rounded to two places) (22d)
13° Multiply the amount on line 11 by the decimal amount on line 12b. Enter theresult. [agi TO
Figure child's tax _ _
Note: /f the amounts on lines 4 and 5 are the same, skip to line 16.
14 Subtract the amount on line 5 from the amount on line 4. Enter the result . 14
15 Tax on the amount on line 14 based on the child's filing status 15
16 Add the amounts on lines 13 and 15. Enter the total 16 |
17 Tax on the amount on line 4 based on the child's filing status . 7
18 Compare the amounts on lines 16 and 17. Enter the larger of the two amounts here ‘and on nForm 1040,
line 38; Form 1040A, line 23; or Form 1040NR, line 36. Be sure to check the box for “Form 8615” . > 18

For Paperwork Reduction Act Notice, see back of form.

Form 8615 (1990)


Form 8615(1990)

Page 2

Paperwork Reduction Act Notice. We ask
for the information on this form to carry out
the Internal Revenue laws of the United
States, You are required to give us the
information. We need it to ensure that you
are complying with these laws and to allow
us to figure and collect the right amount of
tax.

The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated average time
is:

Recordkeeping . 13 min.
Learning about the law

ortheform . 2 . . 11 min.
Preparing the form 37 min.
Copying, assembling, and

sending the formto IRS . 17 min.

If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form more
simple, we would be happy to hear from
you. You can write to both the IRS and the
Office of Management and Budget at the
addresses listed in the instructions of the
tax return with which this form is filed.

Incomplete Information for Parent. if a
parent or guardian of a child cannot obtain
the necessary information to complete
Form 8615 before the due date of the
child's return, reasonable estimates of the
parent's taxable income or filing status and
the net investment income of the parent's
other children may be made. The
appropriate line of Form 8615 must be
marked “Estimated.” For more information,
see Pub. 929.

Line-by-Line Instructions

We have provided specific instructions for
Most of the lines on the form. Those lines
that do not appear in these instructions are
self-explanatory.

Lines A and B. If the child's parents were
married to each other and filed a joint
return, enter the name and social security
number of the parent who is listed first on
the joint return, For example, if the father's
name is listed first on the return and his
social security number is entered in the
block labeled “Your social security
number,” enter his name on line A and his
social security number on line B.

If the parents were married but filed
separate returns, enter the name and social
security number of the parent who had the
higher taxable income. If you do not know
which parent had the higher taxable
income, see Pub. 929.

If the parents were unmarried, treated as
unmarried for Federal income tax purposes,
or separated either by a divorce or separate
maintenance decree, enter the name and
social security number of the parent who
had custody of the child for most of the year
(the custodial parent). Exception. If the
custodial parent remarried and filed a joint
return with his or her spouse, enter the
name and social security number of the

“U.S. Government Printing Office: 1990 — 265-400

person who is listed first on the joint return,
even if that person is not the child's parent.
If the custodial parent and his or her spouse
filed separate returns, enter the name and
social security number of the person with
the higher taxable income, even if that
person ts not the child’s parent.

Note: /f the parents were unmarried but
lived together during the year with the child,
enter the name and social security number
of the parent who had the higher taxable
income.

Line D. If the parent's filing status is
married filing separately and the parent
claimed an exemption for his or her spouse,
write “Spouse” in the space above the box
on tine D

Line 1. If the child had no earned income
(defined below), enter the child's adjusted
gross income (from Form 1040, line 32;
Form 1040A, line 17; or Form 1040NR, line
31).

\f the child had earned income, use the
following worksheet to figure the amount to
enter on line 1. However, if any of the
following applies, use the worksheet in Pub.
929 instead of the one below to figure the
amount to enter on Form 8615, line 1:

e The child files Form 2555, Foreign
Earned Income.

@ The child had a net loss from self-
employment.

@ The child claims a net operating loss
deduction.

Worksheet (keep for your records)

1, Enter the amount from
the child’s Form 1040,
line 23; Form 1040A,
line 14; or Form
1040NR, line 23,
whichever applies .

2. Enter the child’s earned
income (defined below)
plus any deduction the
child claims on Form
1040, line 28, or Form
1040NR, line 27,
whichever applies .

3. Subtract the amount on
line 2 from the amount
on line 1, Enter the
result here and on
Form 8615, line1 .

Earned income includes wages, tips, and
other payments received for personal
services performed. Generally, earned
income is the total of the amounts reported
on Form 1040, lines 7, 12, and 19; Form
1040A, line 7; or Form 1040NR, lines 8,
13, and 20.

Line 2. If the child itemized deductions on
Schedule A (Form 1040 or Form 1040NR),
enter on line 2 the greater of:

@ $500 plus the portion of the amount on
Schedule A (Form 1040), line 27 (or
Schedule A (Form 1040NR), line 10), that

is directly connected with the production of
the investment income on Form 8615, line
1;0R

e $1,000.

Line 6. Enter the taxable income shown on
the tax return of the parent identified on line
Aof Form 8615. If the parent’s taxable
income is less than zero, enter zero on line 6.

If the parent filed a joint return, enter the
taxable income shown on that return even if
the parent's spouse is not the child’s
parent.

lf the parent transferred property to a
trust which sold or exchanged the property
during the year at a gain, include any gain
that was taxed to the trust under Internal
Revenue Code section 644 in the amount
entered on line 6, Write “Section 644” and
the amount on the dotted line next to line 6.
Also, see the instructions for line 10 below.

Line 7. If the individual identified as the
parent on this Form 8615 1s also identified
as the parent on any other Form 8615, add
the amounts, if any, from line 5 on each of
the other Forms 8615 and enter the total on
fine 7.

Lines 9, 15, and 17. Figure the tax using
the Tax Table or Tax Rate Schedules,
whichever applies.

Line 10. Enter the tax shown on the tax
return of the parent identified on line A of
Form 8615. If the parent filed a joint return,
enter the tax shown on that return even if
the parent's spouse is not the child's
parent.

If line 6 includes any gain taxed to a trust
under Internal Revenue Code section 644,
add the tax imposed under section
644(a)(2)(A) to the tax shown on the
parent's return. Enter the total on line 10
instead of entering the tax from the parent's.
return, Write “Section 644” on the dotted
line next to line 10.

Line 18. Compare the amounts on lines 16
and 17 and enter the larger of the two
amounts on line 18. Be sure to check the
box for “Form 8615" on the appropriate line
of the child's tax return even if the amount
on line 17 1s the larger of the two amounts.

Amended Return. If after the child's return
is filed, the parent's taxable income is
changed or the net investment income of
any of the parent’s other children is
changed, the child's tax must be refigured
using the adjusted amounts. If the child's
tax is changed as a result of the
adjustment(s), file Form 1040X, Amended
U.S. Individual income Tax Return, to
correct the child's tax.

Alternative Minimum Tax, A child whose
tax is figured on Form 8615 may be subject
to the alternative minimum tax. Get Form
6251, Alternative Minimum Tax—
Individuals, and its instructions to see if the
child owes this tax.