Dependents must file a tax return and pay taxes if income exceeds set limits. For 2016, a single dependent under age 65 who is not blind must file a return if any of the following applies:
Whether taxes are owed depends on the nature and amount of the income.
An amount of gain on the sale of certain depreciable property that is treated as ordinary income in the case of personal property. Recapture is computed on Form 4797.