UTMA and UGMA accounts
Taxed to the child
Can You Write Off UTMA and UGMA Accounts?
Short answer: Earnings in a custodial account are the child's income; above a few thousand dollars the kiddie tax applies at the parent's rate.
The money legally belongs to the child at the age of majority.
Records to keep: Keep receipts, statements (1098, 1098-T, 1099, W-2G), and a note of what each cost was for. Compare itemizing to the 2026 standard deduction before you claim.
UTMA and UGMA accounts
Taxed to the child
Individuals / Personal Taxes
Earnings in a custodial account are the child's income; above a few thousand dollars the kiddie tax applies at the parent's rate.
Business justification
Earnings in a custodial account are the child's income; above a few thousand dollars the kiddie tax applies at the parent's rate. The money legally belongs to the child at the age of majority.
Category
- Personal Tax Deductions