Solved
My daughter used Turbo Tax but forgot to file the UTMA that was cashed out
How can she reconcile this mistake?
Your daughter will have to file an amended return to add the information that she omitted. Go to the following link for instructions to amend a 2016 tax return that was filed with TurboTax Online.
https://ttlc.intuit.com/questions/3402261-how-do-i-amend-my-2016-turbotax-online-return
An amended return has to be filed on a special form, Form 1040X. It cannot be e-filed. You have to print it and file it by mail. It takes the IRS up to 16 weeks to process an amended return.
Your daughter should not file the amended return until her first return has been accepted and she has received the original refund.
"Cashing out" her UTMA account probably produced a capital gain. If her income is high enough she may owe additional tax on the gain, or will have to pay back part of her refund. If so, she should file the amended return before April 18 to avoid possible penalties and interest.
If she filed a state tax return, she will have to amend that as well.
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