<p>My daughter has an UTMA account that I have managed as custodial account holder. Within a few months we need to convert this account, and I’m wondering the best course of action. Eventually she will manage this account herself, but for the next few years while she is a full time student she would like me to continue handling things. According to Schwab the options are to transfer the account to her name only and file power of attorney documents for my access, or simply to list me as a join account holder. Making it a joint account seems the simplest, but I’m not sure if my status as joint holder would subject her to higher capital gains taxes when she sells stocks to fund graduate school etc. I think as long as I don’t add money to the account after it is converted it should be always treated as hers for tax purposes. Anyone else go through this?</p>
<p>Put the account in her name, and as long as she gives you her login/password, you can manage the account online. If she needs something else that can’t be done online, you can tell her to call and get it done. No need for all the other “official” moves.</p>
<p>I agree with Parent1337. I have recently converted my son’s account (which was long overdue because I forgot about it), tax ID remains the same, i.e.l his SS#, but I will have access to his account and manage it for him. He won’t mind a bit. I also manage his ROTH IRA account, one year the firm applied the contribution to the wrong year, I had him make the call and got it fixed.</p>
<p>Depending on the state, the age for conversion is different, I did not realize it until I was going to do the same with my daughter’s account, can’t convert hers until she turns 21.</p>
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<p>Until she turns 24, her earnings are subject to the kiddie tax. Her income will be taxed at parents’ marginal rate including long-term capital gains. They don’t give a special treatment for long-term capital gains.</p>
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Yes, there’s the rub. I’ve managed several types of accounts (financial and medical) unofficially with password/login information and full consent of the account holders. However each time a situation has arisen in which I’ve needed to communicate directly with service representatives, and it became a major PIA. Several times with my husband we had to use speakerphone so I could recite the questions to him and he could repeat them to the representative, as they could not legally correspond with anyone but the account holder. </p>
<p>Igloo, thanks for the head’s up about the age 24 rule. Big kiddies! I guess she will have to wait a bit longer for 0% capital gain rate. I did find information on a Boglehead forum that only the primary account holder is considered the owner for tax purposes, as long as all the money going into the account belonged to that person. So she can add me as joint owner without affecting either of tax situations.</p>
<p>The up to age 24 rule only applies if they are still a full time student. Once they are out and self supporting it no longer applies. I still have to get my 22 yo S to get a Medallion signature guarantee to get me off his account. Planning to do it when he is home in a few weeks. I have no desire to be a joint owner of his investments.</p>
<p>When Form 8615 must be filed. Form 8615 must be filed for a child if ALL of the following statements are true.</p>
<pre><code>The child’s unearned income was more than $2,000.
The child is required to file a return for 2013.
The child either:
Was under age 18 at the end of the year,
Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or
Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support.
At least one of the child’s parents was alive at the end of 2013.
The child does not file a joint return for 2013.
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<p>What does this mean? Does it apply even if the child didn’t support her-himself from their own earning? Or does it mean if the child supported themselves from their own earnings? I thought it was the latter.</p>