<p>The IRS treats investment income over a certain amount in an under-18 account at the parents tax rate. It’s actually going up to age 24 if the kid is a dependent. So investment income up to (I think $850, not sure) in kids name is tax free. If parents sheltered assets in kid’s name to get that tax free $850 every year from birth-17 THEN put it in parents name to be eligible for more financial aid, the IRS loses a lot of money.</p>