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Author: george9876 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121180  
Subject: UTMA Income Date: 12/29/1998 6:33 PM
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A few years ago I opened an UTMA account for my then 14 (now 17) year old son with money that had accumulated in his bank savings account. I have been under the impression that the few hundred dollars a year that he earned in this account was not taxable since he had no other income, and have never filed a tax return for him. He is now working part time and has earned income and will need to file a tax return this year. Should this UTMA income be claimed on his return each year, or not until he would cash the account in, or ???.
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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: 7744 of 121180
Subject: Re: UTMA Income Date: 12/29/1998 8:52 PM
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[[A few years ago I opened an UTMA account for my then 14 (now 17) year old
son with money that had accumulated in his bank savings account. I have been
under the impression that the few hundred dollars a year that he earned in this
account was not taxable since he had no other income, and have never filed a
tax return for him.]]

If the earnings were in the form of simple interest, then I would agree with you.

[[ He is now working part time and has earned income and will
need to file a tax return this year.]]

Maybe. If the total income (earned plus unearned) is greater than his standard deduction ($700), a tax return will be required, and a tax liability will be generated.

[[ Should this UTMA income be claimed on his
return each year, or not until he would cash the account in, or ???.]]

I'm sure that each year the UTMA account issues a Form 1099INT (for interest income) or other such form to your son under his SS number. That being the case, these interest earnings are taxable each and every year that they are received.

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Roy

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