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I have heard that when the minor of a UGMA account reaches the age of majority and converts the account to an individual account that they get a step up in cost basis for all assets in that account. Does anyone know if this is true? I have searched the FAQ's and other messages but have been unable to find anything on what happens after the UGMA is converted to an individual account. Any help would be greatly appreciated.
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"I have heard that when the minor of a UGMA account reaches the age of majority and converts the account to an individual account that they get a step up in cost
basis for all assets in that account. Does anyone know if this is true?"
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That is not correct; the basis is unchanged on reaching the age of majority, usually 18.
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<<I have heard that when the minor of a UGMA account reaches the age of majority and converts the account to an individual account that they get a step up in cost basis for all assets in that account. >>

Nope. No chance. No way. Never.

<<Does anyone know if this is true? >>

Yes...I do...it's not.

<<I have searched the FAQ's and other messages but have been unable to find anything on what happens after the UGMA is converted to an individual account. Any help would be greatly appreciated.>>

The account is never really "converted". The account always belong to the child. When the child reaches the age of majority, the child can simply legally begin to manage the account. But all of the assets in the account will retain their original basis as they were at the time when the child was a minor. No step up in basis.

Sorry...likely not the answer you wanted to hear.

TMF Taxes
Roy
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