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DanielleCPA
DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Years of Experience in Business & Personal Taxes
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I am custodian on my grandsons UGMA account and there has

Resolved Question:

I am custodian on my grandson's UGMA account and there has been a nice long term capital gain in the account. I want to nail that down for him bu selling the Mutual fund and pay the taxes due the US Treasury.
My question is do I pay the tax on my income tax return or do I have to pay the tax opening an account for hime. He is only 15.
Submitted: 8 months ago.
Category: Tax
Expert:  DanielleCPA replied 8 months ago.

DanielleCPA :

Welcome and thanks for your question!

DanielleCPA :

UGMA accounts are the assets of the minor.

DanielleCPA :

You, as custodian of the account, do not have to pay an taxes on the income. Your grandson, however, does, if the income is significant enough.

Customer:

Sir

Customer:

What is significant in terms of dollars. ??? The gain in his account is approx. 12000.00

DanielleCPA :

The IRS requires minors to pay taxes if they have investment income of more than $1,900.

DanielleCPA :

I apologize - that should say $950.

DanielleCPA :

The IRS taxes dependent's investment income over $1,900 at the parents' rate.

DanielleCPA :

So, with a gain of $12,000, a tax return will need to be filed on behalf of your grandson.

Customer:

Thank you Danielle rally appreciate your kind assistance. Have a nice week end.

DanielleCPA :

You're welcome. Have a wonderful weekend!

DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 662
Experience: Years of Experience in Business & Personal Taxes
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