Comments on: Kiddie Tax Loophole Dead – UGMA & UTMA Now a Poor Choice for College Savings

By: Matt

Matt — Sun, 27 Dec 2009 21:14:03 +0000

Please take some time to sign this online petition to revise kiddie tax.

http://www.thepetitionsite.com/1/Help-Revise-Kiddie-Tax

By: H.A.

H.A. — Sun, 12 Apr 2009 13:02:36 +0000

NickP – your understanding is correct. Many 529s will allow transfer of a UTMA in, however, at that point, unlike a standard 529, your 529 will be labelled a 529/UTMA. This indicates that the 529 is not the property of the account owner (parent), but the benficiary.

Standard 529s are the property of the account owner. The beneficiary can be changed or the money withdrawn by the account owner to do as they please. Not the case when it gets labelled 529/UTMA.

Before doing the transfer to a 529, be very sure that it is meeting your objectives. If you had saved in the UTMA specifically for college, then the 529 transfer may be appropriate.

By: NickP

NickP — Sat, 03 May 2008 21:07:10 +0000

At Fidelity, a UTMA can be transferred to a 529 plan.

If used for higher education, none of the transfer would be taxable.

Is my understanding correct?

By: Paul

Paul — Wed, 26 Mar 2008 21:18:28 +0000

Why can’t a child with a large portfolio provide more than half of his own support and disqualify the parent from claiming him and then take his personal exemption on his own return and avoid the kiddie tax?