Kiddie Tax and Inherited IRA

[NCperson]

@bgoodreau01 what specifically on Lines 6-19 is not understood?

<<Thank you all for your time to help me understand. I did review Pub 501 and specidfically lines 6 thru 19. I guess I don't fully understand the difference between expense and support because both are used there, but I do understand the calculation of support and "yes" my grandson and his parents will complete Form 501.>>

all the expenses items discussed on lines 6-19 are part of "support".  Add up all the expenses items listed and the sum is "support"!  What difference is not understood? 

Lines 6-12 determine the household expenses that are part of "support".   It's the child's fair share of the household costs under the IRS methodology.  It would include the parent's home for the first part of the year and whatever household expenses (rent and utilities?) the child has after college through the end of the year. 

Lines 14-18 are self-explanatory.  These expenses are part of "support" as well.   It's what the parents pay to support the child PLUS what the child paid.  "other expenses" would include anything else not included in lines 14-18.  Note that any medical premiums deducted from his paycheck need to be added in here, etc.  The assessment of "expenses" is all encompassing. 

Total support is line 19 and half of that is the critical number required (line 20). 

if the child's earned income exceeds Line 20, then there is no "kiddie tax" filing requirement. 

If Line 20 exceeds earned income, then there is a "kiddie tax" filing requirement. 

If you follow the form, it is all straight forward.

Only completing the form will determine the "kiddie tax" filing requirement answer.  No one responding to your posts can.  

[NCperson]

@rjs I really appreciate your detailed, comprehensive and considerate responses. 

somewhere along the way, I raised the same issue.  The OPs family needs to complete the Support Worksheet to have a defensible position, if ever audited, that the "kiddie tax" issue did not apply.  I totally agree with you.  

[rjs]

"It would include the parent's home for the first part of the year and whatever household expenses (rent and utilities?) the child has after college through the end of the year."

I don't think we know whether the grandson is still living with his parents or has moved out to his own place, or will move out before the end of the year. I don't recall any mention of where he is living now. Maybe he doesn't know himself whether he will move out before the end of the year, or how much it might cost. Another unknown!