Uniform Gift to Minor's Act

It goes on Sch D of whoever's social security number is on the 1099. You were custodian, but it's his SS# that should have been on any tax reporting documents the account issued. If your number is on the account, it would send a red flag if you do not claim on your tax return. JOE

Not only *can* it go on his return, it *must* go on his return: (1) The money is his, even if he were under 21 (or under 18 for that matter). (2) If he's old enough that the kiddie-tax rules don't apply, that alone means it goes on his return. (3) Even if the kiddie-tax rules do apply (which I suppose they will for him in 2008, though not in 2007), gain/loss from sales of securities can only be reported on the owner's tax return. The election to report on the parent's return is only an option when the investment income is solely interest, dividends, or cap gain distributions. Since there was a sale of securities, the election is not allowed, and it must be reported on his return.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

In addition to Joe's information, be sure your son actually is your dependent. Depending on his tuition (and room/board, if he is living on-campus), which is part of his overall cost of support, and the amount that he is paying (more than half?) out of his own funds (what used to be in the UGMA), he may not meet the test to be your dependent.

BTW, it's not an UGMA anymore since he is not a minor. It would be a parental favor to a 21-yr old college student to help him understand what his money is invested in and what the tax consequences are when he sells those investments, since right now it sounds like you are still handling these things for him.

-Mark Bole

This is an important consideration for the hope and lifetime credit as well.