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Financial Planning / Tax Strategies
|Subject: Why Not Take Gains in UTMA?||Date: 2/7/2013 7:12 PM|
|Author: MurrayS||Number: 117676 of 120431|
So I have a UTMA account for my Daughter at Vanguard. For several years, I've been transferring funds between the S&P index and Total Market index funds while always staying under the standard deduction amount for a dependent ($950 for 2012). AFAIK, staying under that amount meant a return did not need to be filed for her.
I recently discovered that, for 2012, she can have up to $1900 in "unearned" income without paying taxes, but I will have to file a return for her per form 8615: http://www.irs.gov/pub/irs-pdf/f8615.pdf
My question, are there any concerns with transferring between funds to take gains, increase the cost basis and reduce future taxes so long as I keep the unearned income below $1900?
She is 12yo and has no other income.
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