Peter, Not sure what you can do at this point, but you can
try to get the fund to issue a check and try depositing it
in the bank. I would think that the check would be made out
to you (maybe with the term, custodiam for.___) but as long
as you sign it and deposit it I'm not sure why the bank
would balk. You can try calling the bank, or talking to
them first, before getting the check. At this point I don't
think you have any choice but to pay the tax yourself (I
doubt the IRS will care who signs the check!) and recover
the cost later. The worst case scenario I can think of is
you may have to open an custodial account in the kid's name,
using the check, and then writing a check to yourself from
the new bank checking account--but that would be a pain.

I had UGMA accounts for both my kids and the first fund I
set up was a money market fund with signature authority for
myself. This way I paid taxes, lessons, and ultimately
college tuition for them as the need arose.

Good luck,
Bbo

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After doing the kids' return, they have taxes due of about
$1,000. I've been unemployed for two years. Normally, it
wouldn't be a problem for me to just pay the tax myself, but
now the kids have more money than I do. Problem is, if I get
their mutual fund to cut a check, it's made out to "me as
custodian for my child." Will a bank allow me to just
deposit that check into MY account or do I have to open an
UGMA checking account at the bank just to write the checks
to the IRS?

Poor and perplexed,

Peter

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sduraybito[at]go.com (Peter) wrote:

- quote -

If you write a check from your own account, it's not a third
party check. The IRS should take it.

A third party check is one someone writes to you, that you
endorse over to the IRS.

Stu

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How do I pay taxes on UGMA dividends and cap gains? The UGMA
is being held at a mutual fund and I have no check-writing
privileges. The IRS won't take 3rd party checks. Do I flow
the amount through my personal checking account?

Am I the only one with this problem?

Peter

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