bbs[at]mechanicsofmoney.com wrote:

- quote -

Income from UGMA trusts is taxed to the child, on the
child's tax return. At least that was the case the last
time I checked.

Stu

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bbs[at]mechanicsofmoney.com writes:

- quote -

UGMA's aren't like corporations -- they never, ever file tax
returns. They are merely a way to allow minors to hold
assets they otherwise wouldn't be allowed to hold. For tax
purposes the minor is treated as holding the assets
directly.

- quote -

Since there was a sale of securities, the "include the kids'
interest and dividends on the parents' return" shortcut
CANNOT be used.

You'll have to file a return for each child. And no, if
there's a capital loss on the sales it cannot be brought
onto the parents' return. It stays with each child and
carries over on each child's return until it is used up.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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<bbs[at]mechanicsofmoney.com> wrote:

- quote -

Each child will have to file a separate return to report the
gain/loss associated with the liquidation of the original
investment. Childrens' capital gains income cannot be
reported on the parents' return.

Ira Smilovitz

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<bbs[at]mechanicsofmoney.com> wrote:

- quote -

Let's ask Carole to show us what's behind door number three.
UGMAs don't file returns, their beneficiaries do. Since it
sounds like there were Schedule D transactions, the option
of reporting on the parents' return isn't available, so each
child will have to file.

--
Phil Marti
Clarksburg, MD

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bbs[at]mechanicsofmoney.com wrote:

- quote -

Separate returns must be filed for the two children. Capital
gains or losses are not allowed to be reported on the
parent's return (as it clearly states in the form 8814).

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Client has two UGMAs. Last year they were moved over to
another custodian and then the only investment in each one
was liquidated and a new investment purchased. Kids are
only ten and eleven years old. Do the UGMAs have to file
two separate returns or can this just be accounted for on
the parents return? Any insights would be appreciated.

Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php

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