Kiddie Tax for 23 year old?
I am starting college as a freshman at 23. I live with my boyfriend, and since I will now be a full time student, I will be paying my half of the rent by selling stocks in my savings account, and he covers all of our groceries. This has been my plan for a while, so I’ve built up quite a lot to be able to do this, and since I won’t have more than $48,000 in taxable income, my capital gains tax is 0%.
After some research today I am now learning that a full time student under 24 with more than $2,700 of unearned income will be taxed at their PARENTS income tax rate? I believe my parents tax rate is 32%.
Can someone explain this to me, because I’m freaking out now. I will have to pay my parents tax rate on the capital gains of my own stocks- that I have to sell in order to pay for my rent- just because I am a full time student under 24?