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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121565  
Subject: Re: Taxes on a UGMA. Date: 2/8/2013 10:13 AM
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At the moment, this question is academic, because the dividends, interest, and capital gains in a UGMA I set up are low enough to preclude filing, and preclude payment of taxes. But as the amount in the account increases, it may become real at some point.

The problem is that I am not the parent or even related to the minor, so I do not see their tax returns (thank God). I do give them the end of year statement for that UGMA, but I do not know if they do anything about it or not. I sure hope they do. But they get H&R Block to do their returns, and they sometimes file in early January, before I get the UGMA accounting data.

Since I am not the parent, and I give them the necessary information, must I do anything more? I wish I trusted them to wait for the UGMA information, but they never remember that they must do that and file, etc. Also, the minor will someday assume responsibility for that account, when she is 21, and will need to deal with taxes then. I may have all the confirmation slips, but some of those reports that I gave her parents have surely been lost, so she may have trouble with cost basis and stuff.


I assume you have the minor's SSN on the account. If so, then the IRS will contact them directly if there is any meaningful discrepancy in their filed return.

You should be able to arrange with the broker to have duplicate documents sent to the parents (or to the minor) so that you don't have to provide them each year.

Ira
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