Uniform gift/transfer to minors act ca

[BlondiePB]

Originally Posted by anteater

Given the chance to provide an example of an "allowable exception," I note that none is given.


Like how to bring a legal action for the return of the money to the OP's daughter if grandpa doesn't come clean? Oh wait... That's legal advice.

Ant, you're expecting a miracle for DD to provide an example - just like the thread in Probate or Wills section where Sax asked DD to provide law to back up what he wrote....another zilch.

Too bad bandwidth is wasted on wild goose chases for posters.

[Dandy Don]

Too bad bandwidth is wasted on egotistical attorneys more interested in posting arguments rather than providing an ounce of helpful advice to the original poster.

[007]

Thanks everyone for or insight or should I say that you insight; I am sorry I have not tended to my thread and the sound suggestions, I have been out of town on business. Here's another twist, et al:

The shares were sold while at a stock and transfer company. That company says to inquire with the previouse holding company (a bank securities branch) if we want to know the cost basis and history. But then the bank says that I need to go to the back stock and transfer company! What gives?

Is there this hole that people fall into that hides how stocks were sold and their cost basis?

My next private citizen approach is to contact the SEC.

[anteater]

My next private citizen approach is to contact the SEC.

Huh? What is it that you think the SEC is going to do?

Your daughter's beef is with grandpa. If grandpa is not forthcoming with an accounting, your daughter retains an attorney and heads to court.

[007]

yeah, I agree anteater, I am just trying to educate myself before I start shelling out cash on an attorney. One attorney I spoke with may be of help, but while he talks about how complicated of a process it will be, he oversimplifies his role. If he's going to be put on the clock I'd like him to be innovative and audacious. At present, I don't think he's ever done this type of case.
I was surprised how two transfer companies could not provide adequate information. So I got a little education today for my local SEC on what they do and don't have to report and so on. I then spoke with the IRS and will be getting "transcripts" with my daughters SSN. So every 1099-div or INT that has been filed by what ever brokerage firm or transfer agent (with my daughter's SSN on it) should be provided. And it can be sent to me because my daughter authorizes it. This will take some time. So I am more trying to get the puzzle pieces, put some together and see where I go from there.

At the end of the day there are many unknowns that I can find out for myself up front without opening a lawsuit, or paying for attorneys. But you are right, there is going to be the final opening of a lawsuit. God I am dreading this. I just need to get her ready for this.

[BlondiePB]

Originally Posted by 007

yeah, I agree anteater, I am just trying to educate myself before I start shelling out cash on an attorney. One attorney I spoke with may be of help, but while he talks about how complicated of a process it will be, he oversimplifies his role. If he's going to be put on the clock I'd like him to be innovative and audacious. At present, I don't think he's ever done this type of case.
I was surprised how two transfer companies could not provide adequate information. So I got a little education today for my local SEC on what they do and don't have to report and so on. I then spoke with the IRS and will be getting "transcripts" with my daughters SSN. So every 1099-div or INT that has been filed by what ever brokerage firm or transfer agent (with my daughter's SSN on it) should be provided. And it can be sent to me because my daughter authorizes it. This will take some time. So I am more trying to get the puzzle pieces, put some together and see where I go from there.

At the end of the day there are many unknowns that I can find out for myself up front without opening a lawsuit, or paying for attorneys. But you are right, there is going to be the final opening of a lawsuit. God I am dreading this. I just need to get her ready for this.

Please be sure to consult with more than one attorney. A lot do provide an initial free consultation. Stand by for anteater.

[anteater]

Actually, this expedition in information gathering is all well and good. But I really think that it is some psychological gymnastics to avoid facing the fact that grandpa has to be hauled into court.

If you obtained the info that you mentioned in your original two posts - the existence of an UGMA/UTMA account that is now empty - that should be sufficient to proceed.

[007]

the update thus far is he's replied to the letter my daughter sent and to me as well through his attorney (we did stipulate 30 days and he stuck to that). His attorney stated the account standing and that the donor/custodian moved it to a money market last year to protect it. Donor stated that it is a UTMA set up to be paid at age 21, but if my daughter gave good reason he would relinquish some or all if he felt she was doing the right thing with it. It appears he's acting in good faith, but I have two concerns.

1. His attorney has stated to me and in the letter to my daughter that should the need arise he will use the account to defend against any legal action. I did not know you could do that but maybe someone can tell me the ways. Although, as I said, he looks like he is complying with terms of a UTMA.

2. He paid the taxes on the capital gains when he cashed the stocks. I thought that it should have been my daughter since she could have filed it for her own taxes. I think it was needless for him to pay the tax...and he paid it out of the account. Can someone explain this one?

While I want to stay out of the guy's hair and let him be, especially if he's attempting to do this correctly, I find it difficult to understand why he's never passed the information to my daughter and son since both are over the age of 14 and should be filing taxes if there are capital gains being logged on their SSN to the IRS. It also impacts my daughters FAFSA

I am puzzled.

[anteater]

Good to see that things are proceeding well. Grandpa may not be a reprobate after all.

1. His attorney has stated to me and in the letter to my daughter that should the need arise he will use the account to defend against any legal action. I did not know you could do that but maybe someone can tell me the ways. Although, as I said, he looks like he is complying with terms of a UTMA.

I will have to pass on answering this one in favor of anyone with greater knowledge of California UTMA situations. But it does not sound right (as opposed to an estate representative or trustee).

2. He paid the taxes on the capital gains when he cashed the stocks. I thought that it should have been my daughter since she could have filed it for her own taxes. I think it was needless for him to pay the tax...and he paid it out of the account. Can someone explain this one?

I've been wondering but did not want to get into the question of who was paying income taxes. Microsoft has been paying dividends since 2003. And, in 2004, paid a rather hefty one-time dividend - about $3 per share. If the account bore her SSN, it seems strange that the IRS has not come knocking on your daughter's door.

But, absent a nasty tweet from the IRS, I wonder if it is worth opening that can of worms.

[Dandy Don]

You have nothing to be worried about.

The only reason he told you that legal expenses for a defense would come out of the trust money is that this was his way of warning you that IF you were even THINKING about filing a lawsuit against him WITH NO EVIDENCE, that there would be a price to pay. At any point in the future you may want to find out if he is supposed to provide an accounting or whether he will be providing one when the money is disbursed.

You should be thanking him for paying the capital gains--only a CPA or tax accountant would be able to tell you if it was done properly, but it does seam reasonable that the trust would be the entity entitled to this, and not your daughter.

[anteater]

The only reason he told you that legal expenses for a defense would come out of the trust money...

This is not a trust.

You should be thanking him for paying the capital gains--only a CPA or tax accountant would be able to tell you if it was done properly, but it does seam reasonable that the trust would be the entity entitled to this, and not your daughter.

This is not a trust.

And, as an UTMA, the question of who should have reported the income is cut and dry.

[Dandy Don]

Excuse me--it is money that is being held in trust.

[anteater]

Originally Posted by Dandy Don

Excuse me--it is money that is being held in trust.

No, I won't excuse you since you fail to comprehend the differences between a trust and an UTMA account and the meaning of those differences.

That's UTMA - as in Uniform Transfers to Minors Act.

Transfers... Get it! As in, once it is transferred under UTMA, it belongs to the minor.

[007]

I agree with all Anteater. DD appreciate your input, but this is a UTMA. While I'm no CPA, when I provide an updated tax return for my daughter in the form of providing cost basis and capital gains, it shows $0 going to federal and $140 going to state. Also, an 18 year old is considered an 18 yr old for the entire year for tax purposes. Even though the custodian cashed out the stock 6 months prior to her 18th (when she is legally able to own stock in CA), she could have still reported on her statement.

So another question. Can my daughter seek to get overpaid tax rebated from IRS? The custodian paid it paid out of the UTMA.

Finally, both of my kids are filing 4506T to recover IRS transcripts. An IRS customer support agent was explaining that the IRS would be able to forward that info if they have it. Question is will they find any 1099's (DIV, INT, etc) filed on behalf of the account, in my son and daughter's SSNs if they were attached to the custodian/donor's tax return?

[anteater]

So another question. Can my daughter seek to get overpaid tax rebated from IRS? The custodian paid it paid out of the UTMA.

I suspect that you will spend more time, and possibly money, than it is worth. Unless the IRS come knocking, my inclination would be to let that sleeping dog lie.

I am certainly open to correction, but, if I remember correctly, payment of income tax from an UTMA account is considered to be an acceptable use.