Tax consequences of liquidating a utma

Start the conversation with a financial advisor on your college savings goals.June, 2011 Setting up a custodial account can be a savvy move for adults who want to gift their assets and help their children become financially independent. The two types of accounts you can use to gift assets to your youngster are called a Uniform Gift to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA).The corporation makes a direct sale of its assets to the buyer (or buyers).2.

The 20% rate only affects singles with taxable income above 5,800, married joint-filing couples with income above 9,000, heads of households with income above 2,400, and married individuals who file separate returns with income above 9,500.Any amounts over

The 20% rate only affects singles with taxable income above $425,800, married joint-filing couples with income above $479,000, heads of households with income above $452,400, and married individuals who file separate returns with income above $239,500.

Any amounts over $1,900 are taxable at either the child’s or the adult’s tax rate, whichever is higher. Once your child reaches the age of trust termination recognized by your state of residence (usually 18 or 21), he or she will have full access to the funds in the account.

Note that state income taxes are also due, where applicable. Be warned that your child could have different priorities for the assets in the account than you do. For financial aid purposes, custodial assets are considered the assets of the student.

But there are many considerations—and consequences—to weigh before opening an account. Which one you use will depend on your state of residence.

Most states—with the exception of Vermont and South Carolina—have phased out UGMA accounts and now only offer UTMA accounts.

||

The 20% rate only affects singles with taxable income above $425,800, married joint-filing couples with income above $479,000, heads of households with income above $452,400, and married individuals who file separate returns with income above $239,500.Any amounts over $1,900 are taxable at either the child’s or the adult’s tax rate, whichever is higher. Once your child reaches the age of trust termination recognized by your state of residence (usually 18 or 21), he or she will have full access to the funds in the account.Note that state income taxes are also due, where applicable. Be warned that your child could have different priorities for the assets in the account than you do. For financial aid purposes, custodial assets are considered the assets of the student.But there are many considerations—and consequences—to weigh before opening an account. Which one you use will depend on your state of residence.Most states—with the exception of Vermont and South Carolina—have phased out UGMA accounts and now only offer UTMA accounts.

,900 are taxable at either the child’s or the adult’s tax rate, whichever is higher. Once your child reaches the age of trust termination recognized by your state of residence (usually 18 or 21), he or she will have full access to the funds in the account.Note that state income taxes are also due, where applicable. Be warned that your child could have different priorities for the assets in the account than you do. For financial aid purposes, custodial assets are considered the assets of the student.But there are many considerations—and consequences—to weigh before opening an account. Which one you use will depend on your state of residence.Most states—with the exception of Vermont and South Carolina—have phased out UGMA accounts and now only offer UTMA accounts.

Search for tax consequences of liquidating a utma:

tax consequences of liquidating a utma-14tax consequences of liquidating a utma-41

Leave a Reply

Your email address will not be published. Required fields are marked *

One thought on “tax consequences of liquidating a utma”