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10-16-2008, 01:36 AM
| | Member | | Join Date: Aug 2004
Posts: 69
| | | Minor Gift to Parents
What is the name of your state (only U.S. law)? California
I know you can gift up to $12k in 2008 without reporting to the IRS. In 2007, I opened a brokerage account (which I'm the custodian of) and gave my 2 year old $12k.
Now, I need the money to pay for a downpayment. Can I write a check of $12k as the custodian of my daughter's account payable to give the $12k from the minor back to me in 2008. Do I need to report anything to the IRS? |
10-16-2008, 03:34 AM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,487
| | | is this a UGMA/UTMA type account? If so. The money is an irrevocable gift to the child. The child can't give it back and as the custodian you can't take it. Any withdrawals have to be for the benefit of the child. |
10-16-2008, 10:23 AM
| | Senior Member | | Join Date: Mar 2006
Posts: 5,018
| | | I agree with the prevous poster. It's not your money any longer. It is the child's. You have a fiduciary duty to the child in regards to the money and you will not be able, under CA law, to give yourself a gift without court approval.
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10-16-2008, 01:22 PM
| | Member | | Join Date: Aug 2004
Posts: 69
| | | No, I just opened a Etrade brokerage account under my daughter's name. She's the account holder and I'm the custodian. So, can she write me a check to gift the $12k back to me this year? |
10-16-2008, 02:54 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,487
| | | What etrade calls a "custodial account" it is a UTMA account in California. |
10-16-2008, 02:55 PM
| | Member | | Join Date: Nov 2007
Posts: 219
| | Quote:
Originally Posted by jlcl  No, I just opened a Etrade brokerage account under my daughter's name. She's the account holder and I'm the custodian. So, can she write me a check to gift the $12k back to me this year? | This isn't the appropriate section for this. You're asking a question regarding the legality of your authority to operate your daughters account, which is not a tax question. That notwithstanding, if YOU are writing the check as custodian, I somehow fail to see how SHE is making the gift and from an ethical standpoint I find it absolutely horrific that you would give and then take back money from your child for a down payment. |
10-16-2008, 04:50 PM
| | Senior Member | | Join Date: Feb 2007
Posts: 5,487
| | | Well it's loosely appropriate to discuss here. UTMA is pretty much a tax issue. It allows a custodial account with favorable tax treatment |
10-16-2008, 07:23 PM
| | Member | | Join Date: Nov 2007
Posts: 219
| | Quote:
Originally Posted by FlyingRon Well it's loosely appropriate to discuss here. UTMA is pretty much a tax issue. It allows a custodial account with favorable tax treatment | There is no favorable tax treatment for an UTMA as opposed to a non-UTMA account for a child. | |
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