Uniform Gift To Minors Act

[Kurly]

WOW: lots of questions

1. The UGMA is called a trust, taxed on the beneficiaries Individual Tax Return ??

Scenerio: Father purchased stock in childs name, when child was born with father as custodian,. It was set up as a UGMA. Stock sold when child was 9 yrs old for a gain of $12,000. Form 1040 tax return filed under child Social Security Number, Child became liable for tax.??? Father purchased another stock at that time as an UGMA.

Child now 19 yrs old tax for the 10 yr old tax return never paid. Child liable for tax according to father ( it was never paid). True or False ?? Father made an offer in comprimise for 1/2 of the tax liability when child was 16 yrs old, It was never paid.

No $ or stock balance in the UGMA.

HELP. Any suggestions for me to assist the child would be appreciated.

Kurly

[FEDUKE404]

I'm confused here

My guess (consult the board lawyers?) is that the child is now home free due to the statute of limitations issue. It is unlikely fraud per se could be proven.

What does intrigue me is how the child avoided "a letter" from the IRS in the first place, since it is probable a Form 1099-B for the stock sale was issued. If the stock was in a trust, there should have been a Sch K-1 instead. Even with an UGMA account (stock had child's SSN ?) there would have been a kiddie tax issue rattling around somewhere.

The other thing that makes zero sense here is the statement that a tax return was filed. One would assume a balance due appeared on that return???

FE

[Kurly]

UGMA Tax

Yes there was a $2,048 tax due at that time. It was not paid.

K