Liquidating a UTMA - worth it?

Paying for College
21

Half taxed - that’s a lot of gain. Nice investment.

If you liquidate in early 2016 and immediately invest in a student-owned 529 before you declare assets for FAFSA, you’ll get the best of everything: the gain won’t be included in 2015 income, the asset will be considered a parent asset for FAFSA purposes, and there won’t be any legal or ethical shades of gray regarding converting a UTMA asset.

BTW, do you know the UTMA age of majority in your state? If your child is there, legally he/she is entitled to full control of the money.

22

What are you saying? That your kid would gift you the $60k and you would keep it in a new account of your own to only be used for his college expenses? He would have to file a gift tax return if he gifts you more than $14k in one year.

A better idea is that he puts it into his own 529, which will then be counted as a parent asset for FAFSA.