Securities Act

Gifts to individuals are not tax-deductible. Tax-deductible gifts only apply to contributions you make to qualified organizations.For example, if you have one child you, as an individual, may gift that child up to $14,000 per year or as a married couple you may gift your child $28,000 per year.

No, you have no reporting requirement as the custodian. The income from UTMA accounts is the named child's income and is reported under his/her Social Security number.

Every UTMA account has a designated custodian who can make withdrawals or cash in the account at any time. However, the cash can't be used for day-to-day expenses like groceries. It can be used for school outings, music lessons and other non-essentials that benefit the child.

The Uniform Gifts to Minors Act (UGMA) provides a way to transfer financial assets to a minor without the time-consuming and expensive establishment of a formal trust. A UGMA account is managed by an adult custodian until the minor beneficiary comes of age, at which point he assumes control of the account.

In 2020 and 2021, you can give up to $15,000 to someone in a year and generally not have to deal with the IRS about it. If you give more than $15,000 in cash or assets (for example, stocks, land, a new car) in a year to any one person, you need to file a gift tax return.

The Uniform Transfers to Minors Act (UTMA) allows a minor to receive gifts without the aid of a guardian or trustee.The donor can name a custodian who has the fiduciary duty to manage and invest the property on behalf of the minor until the minor becomes of legal age.

For federal tax purposes, the minor or beneficiary is considered the owner of all assets in a UGMA account and the income they generate. But these accounts' earnings can be taxed either to the child or the parent.

There is no ability to transfer a UGMA or UTMA account to another child or to change beneficiaries. You are not supposed to use a UTMA-529 or UGMA-529 account conversion to change the beneficiary either because that would equate to giving your child's money to someone else.

When children reach the age of majority, the account can be transferred into their name only with custodian consent. Otherwise, they can remove the custodian from the account at the age of termination.