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Sep 04
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Due to a recent tax change, UGMA account owners between the ages of 18 to 23 years old will be subject to the Kiddie tax (i.e., will be taxed at their parents’ tax rate) for unearned income in excess of $1,700 beginning in 2008. [This is provided that they are full-time students under age 24 whose earned income does not exceed one-half of their support]. If you or someone you know falls into this situation, you could be well advised to sell appreciated investments prior to January 1 in order to ensure the resulting capital gains are taxed at the child’s presumably lower tax rate. For more information, see this article . We recommend that you consult an independent legal or tax advisor for specific advice about your individual situation.
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