Today TaxMama hears from Michael in Alpine, NJ who tells us, “I have several UGMA accounts opened for each of my children many years ago when they were minors. Today they are all over 21 and I’d like to retrieve the holdings in each account without incurring any tax or IRS wrath. How can I do this? Is it as simple as just closing each account and having the funds sent to me? Can I also have the holdings transferred to my name?”
The acronym UGMA , U-G-M-A, stands for the Uniform Gift to Minors Act.
In other words, those UGMA accounts belong to your children.
They don’t belong to you anymore.
I know. You set them up. You controlled them.
But when your children come of age, they may blow the money.
So, tell your kids about their money. Work the details out with them. Ask them where they want the money sent.
Who knows, perhaps they’ll take you out to celebrate your largesse?
Meanwhile, remember, you’ll find answers about lots of information about gifts and other tax issues, free. Where? Where else? At TaxMama.com
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