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Author: BetterThanGold One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 6776  
Subject: account for a minor Date: 12/1/2011 1:20 PM
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I'm planning to set up a brokerage for my daughter and cant seem to decide what kind of account to set up. what is best coverdell account, a 529 plan,a traditional IRA or a Roth IRA, UTMA or UGMA custodial account?
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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6766 of 6776
Subject: Re: account for a minor Date: 12/1/2011 1:33 PM
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what is best coverdell account, a 529 plan,a traditional IRA or a Roth IRA, UTMA or UGMA custodial account?

It depends on your purpose and your financial situation now and in the future.

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6767 of 6776
Subject: Re: account for a minor Date: 12/1/2011 3:00 PM
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BetterThanGold: "I'm planning to set up a brokerage for my daughter and cant seem to decide what kind of account to set up. what is best coverdell account, a 529 plan, a traditional IRA or a Roth IRA, UTMA or UGMA custodial account?"


reallyalldone: <<<It depends on your purpose and your financial situation now and in the future.>>>

In addition to what rad wrote, your minor cannot open a traditioal IRA or Roth IRA unless the minor has earned income.

Coverdell accounts and 529 plans are intended to used primarily to fund education.

Whose money is it now? Why do you want to open it in your daughter's name? If it is your money, are you making a gift? In what do you want to invest? etc.

Regards, JAFO

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Author: jubs08 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6775 of 6776
Subject: Re: account for a minor Date: 10/10/2014 12:38 PM
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Hello,
I have the same question here.

so i will just answer JAFO questions and hopefully get some great answers.


Whose money is it now? my money

Why do you want to open it in your daughter's name? I believe due to tax related, if my information so far is correct they get taxed less.

If it is your money, are you making a gift? I believe i will be making a gift.

In what do you want to invest? Looking into invest on stocks that pays out dividends.

I also would like to know if there is a way i can withdraw when they decide to buy a home or invest in a business.

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6776 of 6776
Subject: Re: account for a minor Date: 10/10/2014 1:46 PM
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jubs08:

Q: Whose money is it now?
A: My money.
So it will be a gift. You will need to be aware of Annual Gift Tax exclusions amount ($14,000 for 2014) and track all gifts.

Q: Why do you want to open it in your daughter's name?
A: I believe due to tax related, if my information so far is correct they get taxed less.
You will need to be aware of, and monitor changes in the kiddie tax rules. See: http://www.irs.gov/taxtopics/tc553.html You will also want to be aware oo age of majority rule for your state and possible the effect of child's assets on EFC (Expected Family Contribution) calcuations for college.

Q: If it is your money, are you making a gift?
A: I believe i will be making a gift.

Q: In what do you want to invest?
A: Looking into invest on stocks that pays out dividends.

"I also would like to know if there is a way i can withdraw when they decide to buy a home or invest in a business."

It is a gift; it is not your money any more. By the time the child is old enough to buy a home or invest in a business that he/she will run (I would suggest that buying stock is investing in a business, but doubt that is what you mean), the child will likely have passed the age of majority and it is the child's money and the child's decision to withdraw (or not withdraw) for whatever reason (including, wine, [wo]men, and song, or fast car or other toys).

Regards, JAFO

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