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UTMA vrs. Taxable accounts for children

Home General Investing UTMA vrs. Taxable accounts for children

  •  jz 
    Participant
    Status: Physician
    Posts: 581
    Joined: 01/09/2016
    Earnest refinancing bonus

    For children, UTMA accounts and taxable accounts now indistinguishable.  This resulting from TCJA.   Both are custodial until age of majority.  Both can be used for any purpose. Both require annual taxation of  interest, divs, and cap gains. Unearned income in both are subject to trust rates.

    Are there any functional differences that I’m missing?  Both are inferior to 529s for post high school training.

    #171850 Reply
     jz 
    Participant
    Status: Physician
    Posts: 581
    Joined: 01/09/2016

    Existing UTMAs can be rolled into 529s, so advantage there.  This feature might be state specific.

    #171851 Reply
     spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1263
    Joined: 02/01/2016
    For children, UTMA accounts and taxable accounts now indistinguishable.

    Click to expand…

    Huh? UTMAs are minor’s taxable accounts before and after the TCJA.

    #171881 Reply

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