On Feb 6, 9:35*am, "Phil Marti" <prm20...[at]verizon.net> wrote:
- quote -

The UTMA existed with T.Rowe Price. Last year I transfered the
proceeds to a Maryland College Inv Plan 529 also managed by TRP. They
issued me a 1099-B (not 1099-R as I originally said). And the owner of
the 529 is still my daughter. I am only the custodian. So in a sense
it is a utma/529 account. And the account has my name FBO my daughter.
The questions I had were
- since all the proceeds were rolled over into the 529, is there still
a tax liability? The answer seems to be, yes.
- does my daughter have to file her own tax return, or can I attach a
8814 for her to my own return? The 1099-B has the short/long term
gross proceeds and the short/longterm gains.
Thanks
Mark Sabatini

========================================= MODERATOR'S COMMENT:
yes, this is taxable even though put into a 529 plan. And a 1099-B
reporting sales like this disqualifies you from listing her income on your
return. She files her own return and may have kiddie tax.

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Stuart Bronstein <spamtrap[at]lexregia.com> writes:

- quote -

The issue is that the assets in a "normal" 529 plan belong
to the participant, NOT the beneficiary. The participant
can change the beneficiary at any time and can take the money
out at any time for any reason (paying the 10% penalty on earnings
if the money wasn't used for a qualified purpose).

However, a 529 plan can be nested in an UTMA. If this is
done, the participant is only a custodian and the assets
belong irrevocably to the beneficiary.

So if the OP is doing this on the up-and-up, he should open
a UTMA-ized 529 and transfer the UTMA monies into the UTMA/529.

--
Rich Carreiro rlc-news[at]rlcarr.com

--
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joetaxpayer <joetaxpayer[at]nospam.com> wrote:
- quote -

It's the daughter's money, but he's the trustee. Is it prohibited that
someone can set up a 529 plan for himself?

Stu

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"joetaxpayer" wrote:

- quote -

Beats me. Legal or not, it's gross income to her.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Phil Marti wrote:
- quote -

Is this legal? If the OP is the owner of the 529, with the right to
change the beneficiary, didn't he just take money (the UTMA money) away
from its legal owner, even though she is a minor?
JOE

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<msabatini2001[at]yahoo.com> wrote:

- quote -

I suspect it's a 1099-B, not a 1099-R. Yes, there's a tax consequence even
though the proceeds went into a 529.

Your daughter must file a return, reporting the sale on Schedule D. In
calculating the tax she must take into account the "kiddie tax" provisions.

See the 1040 instructions.
--
Phil Marti
Clarksburg, MD

--
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On Feb 5, 1:33*pm, msabatini2...[at]yahoo.com wrote:
- quote -

in regards to an UTMA account. Are you SURE about it being a 1099-R?
The R stands for RETIREMENT.

Gene E. Utterback, EA, RFC, ABA

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I had a UTMA in my daughter's name. Last year I closed this account
and transfered the assets into a 529 account. The mutual fund sent me
a 1099-R with the proceeds.
Is there a tax consequence because of this? All the proceeds were used
to open the 529 account, so is there still a tax liability due?

Where on the Federal tax form do I declare this? Or is this another
form?
Thanks.
Mark Sabatini

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >