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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10144
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I opened a custodial savings account son when he was an

Customer Question

I opened a custodial savings account for my son when he was an infant. He is now 18, but the bank holding the account is based in Arkansas, where the age for a minor to assume an account on his own is 21. If I transfer all funds from the custodial savings account to a new savings account in his name only, will I have to report the funds as income on my federal income tax, since I technically 'withdrew' them from the custodial account?
Submitted: 4 months ago.
Category: Tax
Expert:  Lane replied 4 months ago.

Hi,

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No, this is just a transfer of the principal. (a re-titling from custodial ownership to individual ownmership)

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The taxes have been paid all along the way, as per the kiddie tax rules, as I'm sure you're aware. (Much, if not all, of the income being tax exempt).

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Only Items of INCOME (dividends, interest) once they are IN your son's name only, will be taxed (to him) going forward.

Expert:  Lane replied 4 months ago.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here

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Thank you!

Lane

I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

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