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Financial Planning / Tax Strategies
|Subject: UGMA Tax Question||Date: 3/11/2013 11:06 AM|
|Author: John3haha||Number: 118023 of 122555|
Hello oh wise tax folk,
My father passed away about ten years ago, and set up UGMA accounts with a family friend for college savings as part of the will. The UGMA were owned by our kid, with the family friend as custodian.
Upon turning 18, ownership moved directly to my child.
The IRS is asking for taxes on the entire amount transferred.
It seems to me the initial amount in the UGMA account might be considered a gift and just the mutual fund earnings since account inception considered taxable earnings.
I persume we do not get to split income into long term capital gains vs. income for a basic mutual fund (VTSMX).
Help would be appreciate.
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