<p>Can anyone help with this? How are UGMA account distributions handled for tax purposes? Are the distributions income for the parent or the child? Can't seem to find an answer on the internet about this.</p>
<p>Thnaks in advance!</p>
<p>Dividends, mutual fund distributions, capital gains realized from selling funds, stocks or options all done within a UGMA are all income to the child. I think there’s a way for parents to elect to report their child’s income on the parent tax form, but I’ve always filed forms for my sons.</p>
<p>You probably already know that the first $900 of a child’s investment income is tax free and the next $900 is taxed at his or her own rate. Any unearned income in excess of $1,800 is taxed at the parents’ (presumably) higher tax rate.</p>