Inheritence for a minor

[Like2Plan]

BTW, I had my taxes done last week and the CPA suggested just putting it in the UTMA. There's a slight tax break for the first $700 owed in taxes (according to him) and after that it's at my rate. He didn't say anything negative about me setting up a brokerage in my name, except that it's fully taxable at my rate. Really, he wasn't considering the fact that a young adult would have access to, possibly, $60k at 18 years old. (The $34k would be invested aggressivly over the next 7 - 10 years -- at least for the next 5 years. )

Slicer,
Actually, the first $850.00 (for 2007) of your child's unearned income is not taxed. The second $850.00 of your child's unearned income is taxed at your child's rate. Above $1700 (for 2007) is taxed at the parent's rate.

Obviously there is an advantage up to $1700.00 of unearned income. If you are expecting your child to earn more than that, you might want to focus on investments that are more tax efficient.

IRS publication 929


Tax on investment income of a child under age 18


Understanding the Kiddie Tax

'Kiddie Tax' Loophole Is Closing!