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My father has set up a UTMA account for my daughter. All the paperwork and documentation goes to him. For the year 2006 she did not receive enough dividend income to fall into a taxable status. This will not be the case for 2007. Who is responsible for the taxes on this account?

Major
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My father has set up a UTMA account for my daughter. All the paperwork and documentation goes to him. For the year 2006 she did not receive enough dividend income to fall into a taxable status. This will not be the case for 2007. Who is responsible for the taxes on this account?

Your daughter. You can pay it for her if you like.

Phil
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My father has set up a UTMA account for my daughter. All the paperwork and documentation goes to him.

I would strongly urge you to get a copy of (at least) the year-end statement(s) for the account(s) -- either from the institution holding the account or directly from your father. Even if you merely write the numbers in a notebook -- some kind of record keeping. At some point, you might need the documentation when you make redemptions.

BT DT.

~~ Alison
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I would strongly urge you to get a copy of (at least) the year-end statement(s) for the account(s) -- either from the institution holding the account or directly from your father. Even if you merely write the numbers in a notebook -- some kind of record keeping. At some point, you might need the documentation when you make redemptions.


Just to extend this suggestion, I would also suggest that if the OP uses a money tracking software like Quicken or MS Money, then set up a separate file for the child. That way, all the data can be collected and tracked in one place, and when the child leaves home, the OP can just give the child the file and the child will have all the basis and transaction information.

I've done that with my kids because there's no way to separate out accounts in Quicken, so this way, they each have their own file that they can take with them and manage on their own.
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I would also suggest that if the OP uses a money tracking software like Quicken or MS Money, then set up a separate file for the child. That way, all the data can be collected and tracked in one place, and when the child leaves home, the OP can just give the child the file and the child will have all the basis and transaction information.

If the OP has already accumulated substantial history in Quicken in the same file with his own information, he can save the file under a different name then delete all the accounts other than the child's. This might look like a lot of work, but it beats re-entering a lot of historical transactions for the child.

BTDT.

Patzer
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If the OP has already accumulated substantial history in Quicken in the same file with his own information, he can save the file under a different name then delete all the accounts other than the child's. This might look like a lot of work, but it beats re-entering a lot of historical transactions for the child.



Thanks. That's a great work-around.
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