Tax consequences of liquidating a utma fraud through online dating
Investment income, income or capital gains on the assets are taxable.Depending upon facts, these can be reported on the child’s return or parent’s return.I'm not talking about the liquidation of the account, that has already occurred and will result in a taxable event - being paid by the custodian. No, those funds are considered a gift to the child and held for the benefit of the child.
By doing so, you may be able to reduce your estate and the taxes you owe on your investment earnings or capital gains. Any financial institution typically allows you to open a custodial account.You just need the information for the custodian and the minor and make some sort of donation to open the account.One perk of the custodial account is that there is no ceiling on how much you can contribute or any income restrictions, unlike some of the other college savings plans.With these accounts, you appoint a custodian, which is typically the parent.Once the child reaches “age of majority”, then it's legally their money and they get to do with it what ever they please.
As the custodian, you can make certain withdrawals from the account to cover expenses for the benefit of the child, such as school fees, tutoring, computer equipment, etc.