UTMA questions

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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Topic Author
Patrick584
Posts: 93
Joined: Wed Sep 06, 2017 8:38 pm

UTMA questions

Post by Patrick584 »

If I’m at the top of 0% LTCG bracket, would kiddie tax push tax rate into 15% bracket or would all ltcg income subject to kiddie tax get 0% rate?

How does dependent income impact ACA subsidies?

How does dependent income impact eitc?

What are standards for fiduciary expenses? Maybe is there a resource that would list what expenses would be appropriate?

What is a good custodian that can offer investments and checking at one spot? Wells Fargo and Vanguard are my current main custodians. Vanguard wouldn’t have checking and I’m not familiar with WF brokerage. Would it be simple enough to link accounts at two custodians?

Any tips for using UTMA accounts for gifting appreciated shares and covering appropriate expenses without accumulating a large balance?
Makefile
Posts: 2657
Joined: Fri Apr 22, 2016 11:03 pm

Re: UTMA questions

Post by Makefile »

Hmm, interesting questions.

As to the taxes, my understanding is that if you get into kiddie tax territory, it is still the child who pays the tax, i.e., Form 8615 gets filed with the child's return even though it needs data from the parent's return to be calculated. The parent's AGI is unaffected.

If you were referring to Form 8814, election to report child's interest and dividends on parent's return, my understanding is that this form is an outdated holdover from the pen-and-paper days, for convenience purposes. It doesn't save money and may even cost you more in taxes to use it rather than filing a separate return for the child. I would like to be corrected if someone has an example where Form 8814 is advantageous for a child with more than $1,100 in investment income.

Are you sure you need a checking account? Can you turn on checkwriting on your Vanguard settlement fund?
Topic Author
Patrick584
Posts: 93
Joined: Wed Sep 06, 2017 8:38 pm

Re: UTMA questions

Post by Patrick584 »

I came up with an answer on ACA subsidies. There is a spot for dependent agi on the tax form.

It may be reasonable to have a brokerage account and checking account at different custodians just like I manage my own assets. It still would be good to know who is good with UTMA accounts.
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