Hi everyone,
I have some tax preparation questions for the forum regarding UTMA and related matters. Here is the background:
1. I'm a parent.
2. My in-laws bought mutual fund shares for my 12-year old daughter.
3. They are held as Uniform Transfers to Minors Act shares in account #1 and account # 2.
4. In 2018 the shares produced a total of $180 in dividends.
5. 50% of the shares are held by my father-in-law (her grandfather) as custodian.
6. 50% of the shares are held by her mom (my wife) as custodian.
7. 12-year old had no other income.
My questions are:
Q#1. Does this income need to be reported on anyone's tax return? (I've read that the first $1,050 of unearned income is tax free.)
Q#2. If it must be reported, whose tax return does it go on? Mother's? Grandfather's? Daughter's?
Q#3. If it must be reported, there is this problem. As stated above, there are 2 UTMA accounts with the mutual fund company. I note that the mutual fund company misspelled my daughter's name on 1 of the 2 accounts on the 1099-DIV. I'm concerned that the discrepancy might result in someone's return being flagged. Her social security number is correct for both accounts on the 1099-DIV. Q#4. If the income must be reported, will I need to file an amended return at some point if the spelling of the name is corrected on the mutual fund account?
