There are other things to consider if I remember correctly; like if the parents are claiming him on their return. If the parents claim him then he checks the box that someone else can claim him on their return. Looking at the 1040 EZ; it's #5 on the front of the return 5. If someone can claim you (or your spouse if a joint return) as a dependent, check the applicable box(es) below and enter the amount from the worksheet on back. Worksheet for Line 5 Dependents Who Checked One or Both Boxes Use this worksheet to figure the amount to enter on line 5 if someone can claim you (or your spouse if married filing jointly) as a dependent, even if that person chooses not to do so. To find out if someone can claim you as a dependent, see Pub. 501. A. Amount, if any, from line 1 on front . . . . . . + 300.00 Enter total ⶠA . B. Minimum standard deduction . . . . . . . . . . . . . . . . . . . . . B . 950.00 C. Enter the larger of line A or line B here . . . . . . . . . . . . . . . . . . C . D. Maximum standard deduction. If single, enter $5,700; if married filing jointly, enter $11,400 . D . E. Enter the smaller of line C or line D here. This is your standard deduction . . . . . . . . E . F. Exemption amount. If single, enter -0-. If married filing jointly and both you and your spouse can be claimed as dependents, enter -0-. only one of you can be claimed as a dependent, enter $3,650. > F . G. Add lines E and F. Enter the total here and on line 5 on the front . . . . . . . . . . G .

dave100: that's interesting and had to do some surfing. Cutting & pasting the whole article I found since this was quite readable and, Luddite that I am, my attemps at links go off into cyberspace. Don't throw away anything you've faithfully saved till now - quarterly statements, confirmations, etc. since the buy/sell, gain/loss tracking goes forward and it's still up to you to be able to track your dealings backward. Right? I have a couple of brokerage accounts as well as investments outside brokerages - no problem there as I can see. But I initially received, as a gift, a block of stock in our local power company back in the 70's. (I still have the initial cost basis, etc. paperwork). But I have always reinvested the dividends to purchase more shares and the new cost basis is, of course, reflected on the next statement. I've saved every one of these statements over the approx. 40 years in the event I'd ever sell some of it since any sale is going to involve a real mix of share price. I like hard copies of things; I don't do much online tracking. Consequently I have boxes of "important" investment papers all in good order. The beauty of it is my heirs will not be pulling their hair out trying to find things when THAT TIME comes. (We've done enough sifting in dealing with others' estates to have learned some valuable lessons.) The article: [Broker-dealers, mutual fund companies and fund custodians are updating systems to comply with the cost basis reporting requirements included in the Emergency Economic Stabilization Act of 2008. Brokers must begin reporting cost basis to the Internal Revenue Service and to taxpayers for trades beginning Jan.1, 2011; fund companies have until 2012 to comply. Custodians are not required to comply with the legislation, but they provide the technology as a service to their broker-dealer clients. For their part, wirehouses already track this data so the deadline is a non-issue for them. "The tech implications for cost basis are significant and if firms don't start now, they will never get it done in time," said Sean Cunniff, research director for brokerage and wealth management at Needham, Mass.-based TowerGroup. The aim is to guarantee full reporting of capital gains so the IRS receives its fair cut of investors' profits. Estimates from the Government Accountability Office and IRS put the amount of underreported capital gains at $7 billion to $11 billion per year. REDUCED TAX BILLS Ironically, because the technology allows for improvement of cost basis reporting, many advisers will be able to harvest losses more efficiently, reducing their clients' tax bills. Costs estimates for the enhancement range from $200,000 for a small, self-clearing broker-dealer to a multimillion-dollar expense for custodians, according to a participant who asked not to be identified. Systems within broker-dealers that require overhauls are the account transfer systems that interact with brokerage firms, as well as their order management systems. Historically, tracking cost basis has been a headache, a responsibility of investors who would have to dig through dusty old confirmations to determine the amount they paid for a stock or bond. For many firms, completing the fixes requires a multistep process that can frazzle the nerves of even the calmest, most experienced technologists. "This will take months just to scope out, and then you must build or buy a solution and integrate it with your current system," Mr. Cunniff said. "Then you test. Then you fix the bugs. Then you deliver." At Raymond James Financial Services of St. Petersburg, Fla., the battle to meet the deadline is under way. "We know it's a significant change and that's why we've started working on it already," said Josh Bohlander, senior manager in information technology. Hindering the project, however, are questions about how reporting should be done for wash sales, gifted securities, sales-load-basis deferral adjustments, and for fixed-income securities. "These are items not pinpointed in the current legislation," said Dale Skinner, a technology product manager with Raymond James. "We and the rest of the industry still need more clarification from the Internal Revenue Service on particular areas." Other firms are also waiting for the IRS to set a clear direction for the development effort. "We are still waiting for the IRS to make its final recommendations," said Teri Manton, a director in the product management and development group of Pershing LLC of Jersey City, N.J. Marjorie Qualey: Would like to see the IRS determine the format it wants the reports to use. "We still need to know exactly what format the IRS wants us to report it in," said Marjorie Qualey, vice president of product development and technology at Schwab Institutional in San Francisco. In response, a spokesman for the IRS said it was "continuing to work on the issue." Rather than build the upgrade themselves, some companies are retaining third parties to provide the software, an approach that OppenheimerFunds Inc. of New York pursued. "Due to the complexity of building this into our own systems, we decided that it made more sense to partner with [GainsKeeper]" to build this enhancement, said Christine Polak, vice president of operations at the mutual fund company, who declined to disclose the cost of the software. GainsKeeper, a provider of cost basis and tax software, is a division of Wolters Kluwer Financial Services in Minneapolis. Over the next two years, Ms. Polak will collaborate with the vendor to provide clients with cost basis data, in the form of their choice. Under the legislation, clients can select the way they want to report cost basis data to the IRS, such as the average cost basis or on a first-in-first-out basis. Although earlier attempts to pass the cost basis rules failed, Pershing assumed that passage was inevitable and began working on the project, Ms. Polak said. "The whole idea of these regulations isn't new to us; we are very well-positioned and have been working closely with [the Securities Industry and Financial Markets Association of New York and Washington] for several years now in planning for this legislation," said Ms. Manton. So far, the firm has developed a Form 1099 tax and year-end statement that breaks out gains and losses and addresses the bulk of the regulatory requirements, she said. Some broker-dealers, such as Cambridge Investment Research Inc. of Fairfield, Iowa, and Securities America Inc. of Omaha, Neb., receive cost basis information from their custodians, Pershing and National Financial Services LLC of Boston, respectively.] (Davis Jankowski, InvestmentNews, December 14, 2008)

Dick and the way he handles his payments or lack of them is really no concern to you...and really doesn't affect what Nick owes. Not only are you taking on Nick's problems, but also Cari's, (who you barely know). Their payments and arrangements are their business and aren't an excuse or reason for Nick to not pay, or pay less. I wouldn't get involve with their legalities just on Cari's word and what you see (maye the in-laws bought the car, someone died and left an inheritance, etc). Nick and Jane's arrangements (and their kids) are the only thing you should even be thinking or worried about. You're focusing too much on personalities and who is right or wrong, what is fair, what should be, etc...when, in fact, you should be focusing on solving the actual problems.... getting all the orders to stop, getting money back if due for the oldest when not in school, making sure the billing is set up right for the kid's medical bills, and making sure your stuff is protected if you marry, right? How Jane is living, and how big a bit&h she and Dick may be really doesn't matter. Your hatred for them is going to drive you crazy. They are not worth worrying about. Repeat, they are NOT worth it. Quit thinking about fairness and try to resolve only what needs to be resolved that you can afford to do. Life isn't fair and people aren't nice and you will probably never be able to change Dick and Jane...They've taken enough from you financially, don't let them take your psyche and relationship too.

In Canada, when we sell, we use the average price. I bought shares in a dependable bank (only half a dozen biggies and more highly regulated in Canada) 50 years ago for about $4.25 per share, paying about 10 - 12 cents annual dividend, at lower tax rate than one pays on interest income, which is taxed at top rate, could have sold in 2007 for $107. , paying $3.08 annual dividend ... and when they were heavily involved in the financial fiasco in a nearby country in 2008, share price went down to $40. or so. People said, "Oh, my God! What a loss - I hope you sold earlier!". When the loss is small, one chooses to let the fluctuation ride, and when it goes down further, one doesn't want to take that loss. I asked them whether they felt that a Canadian bank might go broke, this week or next? A number of experts said later that that bank darn near did go broke - gov't. bailout? Others said that they would almost surely cut the dividend, heavily. They didn't - it stayed the same for about 4 years. I hoped that one day it would pay me each year the price I'd paid for the stock in the first place - granted - about 40 years before ... when a dollar was worth a lot more. The stock has recovered to about $124. dollars recently, $111. now ... paying $5.60 dividend, $1.35 above the original stock price, at low tax rate. How much have I paid a money manager to take good care of it through those 50 years? Not one penny. If you'd like mutual funds, about 90% of whose managers don't produce better than the segment of the markets in which they operate, that's your choice ... but spend some time learning how money and investments work, maybe starting in the library. If you're in Canada, check "Canadian MoneySaver" magazine, which doesn't carry ads: maybe attend one of the 40 or so groups of subscribers that meet to discuss investments - I've been involved monthly for about 20 years. After you've gained some experience, maybe done paper trading for a while, put some of your investable assets into quality stocks ... and pay yourself the 1.5 - 2.5% or so of their price that you pay the managers of the mutual funds. ole joyful