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R
RBB10
July 11, 2020
Question

1099-B for UTMA withdrew to pay tuition, does this need to be entered?

  • July 11, 2020
  • 2 replies
  • 0 views

Withdrew from UTMA to pay tuition, received a 1099-B. Do we need to pay taxes on this as the amount went directly to pay tuition?

2 replies

SusanY1
SusanY1
July 11, 2020

Maybe.  There is no exemption from tax for sales/withdrawals from UTMA accounts.  However, the income is reported on the beneficial owner's tax return (typically, the student) as it is considered to be the asset of the minor.  

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Hal_Al
Hal_Al
Employee
July 12, 2020

Simple answer: yes.  Withdrawals from a UTMA are nor exempt from tax just because the money was used for tuition.

 

This is why 529 plans have replaced UTMA as the main savings vehicle for college.

 

 

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