Ugma

[Kurly]

Hey folks:

One of the statements in this UGMA trust states that the first $850 in EARNINGS each year is free from Federal taxes and the next $850 EARNINGS is taxed at the child's tax rate. Afterwards, EARNINGS are taxed at the normal rates.

When does this become taxable earnings if the UGMA trust is not distributed until the beneficiary reaches the "age of majority" 18 or 21 in most states?

Thank You Have a great bailout!

Kurly

[travis bickle]

You have to

Hey folks:

One of the statements in this UGMA trust states that the first $850 in EARNINGS each year is free from Federal taxes and the next $850 EARNINGS is taxed at the child's tax rate. Afterwards, EARNINGS are taxed at the normal rates.

When does this become taxable earnings if the UGMA trust is not distributed until the beneficiary reaches the "age of majority" 18 or 21 in most states?

Thank You Have a great bailout!

Kurly

contend with the Kiddie Tax "Effective Jan. 1, 2008, the kiddie tax will apply to children age 18 and younger as well as college students under the age of 24."

So, if Mom & Dad claim a child in the above age areas, dig out your Kiddie Tax Slide Rule.

[FEDUKE404]

not distributed??

If I understand the original question, it is asking if there is no tax just because the annual earnings are not yet distributed???? (The dollar amounts cited are just the "steps" of the kiddie tax calculations.)

That's pretty well a non-issue, and the kiddie tax has now returned from the dead with more vigor than before. Many people (like myself!) who thought that sucker was in the rear view mirror now have to deal with it again for our college age offspring.

Actually, I have a hard time comprehending a "kiddie tax" for a 24 YOA college student...

FE