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Author: siobhan Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121263  
Subject: Closed accounts... taxable?!? Date: 2/27/2000 2:55 PM
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Help! This is my second year out of college and, as part of the transition into adulthood, I took over an account into my own name that had previously been held as a custodial account through my mother (thanks, mom!).

I closed the custodial account in 3/99, and the 1999 consolidated statement is showing over $11,000 in realized proceeds! Yikes! Even though I never saw a penny of that money and immediately reinvested it all in the same exact stock under my own name, do I owe income taxes on over $11,000 "additional income"?

I don't know if this is specific enough to garner a firm answer, but I could use any hints out there!

Thanks, Fools!

siobhan

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30324 of 121263
Subject: Re: Closed accounts... taxable?!? Date: 2/28/2000 3:43 PM
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<<This is my second year out of college and, as part of the transition into adulthood, I took over an account into my own name that had previously been held as a custodial account through my mother (thanks, mom!).>>

Which was really your account all along...just being managed by Mom.

<<I closed the custodial account in 3/99, and the 1999 consolidated statement is showing over $11,000 in realized proceeds! Yikes!>>

Which means that it must have been some kind of mutual fund account...at least I'm guessing. If it were a normal brokerage account, you would have told somebody to sell something...so this wouldn't be as much as a shock.

<< Even though I never saw a penny of that money and immediately reinvested it all in the same exact stock under my own name, do I owe income taxes on over $11,000 "additional income"?>>

Sorry...but there are no provisions to "reinvest" stock or mutual funds and avoid any gains. If you sold something, you're required to report the gain or loss. Period. Regardless of what you did with the money.

<<I don't know if this is specific enough to garner a firm answer, but I could use any hints out there!>>

You had better hope that good ol' Mom kept the basis records so that you can compute and report your gains and losses. I can't get much firmer than that. Sorry.

TMF Taxes
Roy


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Author: siobhan Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30365 of 121263
Subject: Re: Closed accounts... taxable?!? Date: 2/28/2000 8:16 PM
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Thanks, Roy.

This is what I feared all along. I'll do some more research, but at least I know Mom is a notorious record-keeper. (thanks again, Mom!)

:-)

siobhan


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