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1. Do we have any obligations to the IRS with this account, except for paying taxes on all interest income exceeding $700?

Technically, the obligation to pay the taxes is your daughter's. Her SSN should be on the account. If your daughter is under age 14 and her income is only from dividends and interest, you have the option of reporting the income on your tax return and paying the tax at your income tax rates, but it's not your obligation. Of course, none of this precludes you from paying the income tax on her behalf (as a gift).

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