If your child turns 21 and is still a full-time student, the account can still get hit with taxes.
My daughter is about to turn 21 and will be able to control the custodial account we established for her years ago. Will she qualify for the 0% capital-gains rate if she sells shares after she has control of the account? She is in college, and my wife and I claim her as a dependent. —J.D., New Hartford, N.Y.
Your daughter should wait until she is 24 or supporting herself to sell most of the stock, recommends John Dundon, an enrolled agent in Englewood, Colo. At that point, the gains will be taxed at her own (likely lower) rate.
Have a question? Contact John Dundon, EA, Taxpayer Advocacy Services, Colorado
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