My question is about the kiddie tax. Will being claimed as a dependent effect my capital gains tax?======>> Yes but it depends UNLESS your tax bracket is higher than 15%(UNLESS your tax rate is higher than 15%, your LTCG tax?d be $0);since as a dependent, you can not claim your personal exemption of $4050 for 2016, this?d increase your taxable income and affects LTCG rate on your unearned income of $20K.Generally, you are affected by the Kiddie Tax ONLY if your unearned income exceeds $2.1K and your age is18 at the end of 2016, with earned income that is less than (or equal to) half of your support for the year; or age 19-23 at the end of 2016, with earned income that is less than (or equal to) half your support, and you are full-time students. I guess you do not pay tax on your LTCG of $20k as your tax bracket is lower than 25%
Because I was a full time student and under 24, my parents can claim me as a dependent because they provided half of my support. ===>Right aslongas you do not support half of your support, then, even if you need to file your return you can be calmed as a dependent by your parents,
However, the kiddie tax requirements state that as long as I had enough earned income to have provided half of my support (which I did, 10k is more than enough) , then I am not subject to the tax. ====>Correct kiddie tax is not for you
But because the requirements to claim a dependent state that if someone provided half of your support, they can claim you. So because I made enough to have provided half my support, I am not subject to the kiddie tax, however, because I didn't actually use my earned income to cover half my support, I can be claimed as a dependent. Right?=============>>Correct; as you said, your earned income amt of $10k EXCEEDS half your support, kiddie tax is not applied to you;however, you can be claimed by your parents UNLESS you support half of your support.