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| *Loan,banking and credit>>>tax accounting |
I have two custodial accounts through Sharebuilder. Do I pay taxes on the dividends, or do my nephews? |
My nephews have no other income (that I know of). Assumedly these stocks will be worth lots of money by the time they turn 18 - then I give them the accounts, and there will be tax implications there, too. But what? Will I get some sort of gift credit? And how about all the taxes I will have paid on the dividends earned for the previous 18 years - do I need to keep track of them? Is there any reason I should have these custodial accounts at all, rather than buying the stock myself and then gifting it to them in 18 years? Either I'm missing something or this is just pointless. Whose social security number is listed on the account? If each account in in a nephew's ssn, that is how the dividend income will be reported. And tax returns should be filed by (for) each nephew. If the accounts are under your ssn it is still possible to count the income as belonging to the kids but it is a little more complicated. If the money is enough to be concerned about, you should get a tax professional to help you with the paper work (at least once) --- The dividend income is a separate issue from the principle itself. You need to look into the Uniform Gifts to Minors Act (UGMA). You will almost certainly need a tax professional to advise you on the tax implications. You should talk to a tax professional NOW, not when the nephews turn 18 Yes, you do need to see who is exactly listed on there as far as the SS# goes. If it is you, then you are liable. You need to know the date that each stock was bought and for how much. You will have to have this info when you sell it. If you transfer the stocks into your nephew's names, then their basis in the stock is the amount the stock is worth on the day you transfer it. You have to report stocks in the year you sell them, no matter if it is gain or a loss. It is always best to talk to a tax pro about this! H & R Block can do any kind of tax return you need. They are also financial advisors. They can tell you what would be best. Go to hrblock.com to find a local office and to print off a coupon. Please don't wait until your nephews turn 18. You may pay for it latter. GOOD LUCK and GOD BLESS! |
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