For UGMA/UTMA accounts, all of the following statements are true except:

Question

Quizplus · Accepted Answer

For UGMA/UTMA accounts, the tax implications can be more complex than simply being taxed at the child's rate. While the first $1,100 of unearned income can be tax-free and the next $1,100 is taxed at the child's tax rate, unearned income over $2,200 is taxed at the parents' tax rate if the child is under 19, or a full-time student under 24. This is known as the "kiddie tax," making statement B not entirely true.

For UGMA/UTMA Accounts, All of the Following Statements Are True