Those of us who are parents of Gen Z children know it’s “no cap ” that we have no clue what our children get up to on the internet. My son, for example, makes a lot of YouTube videos of our cat for some reason. Thankfully, he hasn’t monetized his videos (yet!), so they don’t carry any tax consequences. However, many taxpayers are finding out that their dependents have spent their time in the metaverse, defi gaming, or nfts, and as a result have engaged in dozens to thousands of taxable transactions without even being aware it. Those transactions may also trigger the “Tax on a Child's Investment and Other Unearned Income,” also known as the “Kiddie Tax.” Read on to learn more...
Lessons Learned from the Tax Court: The Root of the Issue
Matt Metras, EA
When is a business really a business? As Supreme Court Justice Potter Stewart said in 1964, “I know it when I see it.” The US Tax Court, however, maintains a slightly less subjective standard. The Roots were pretty sure they were running a bona fide business; the IRS, however, didn’t share the sentiment. And since we’re reading about them in a segment called “Lessons Learned,” one should assume it did not go the way the Roots would have liked.
