Transfer of Stocks

Forum|Forum|5 years ago
December 18, 2020
2 replies
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I had setup a UGMA account to save for my sons college. This account also has stocks that were given to him by his grandparents. He is 21 now and the account has to be closed. I want to move the stocks from his grandparents into his own stock account that he already has and move the others into my stock account so I can continue to manage them until he is out of college. Can I move the stocks that were for his college to my account with out having tax issues or do I need to move them all to his? The value is over 40k.

Not A Product Question

M-MTax

If you move them into an account in your name that might be seen as a gift so you're better off keeping them titled in account with his name and having authority like a POA to manage the stocks.

Hal_Al

Employee

You do not "have to" close the account just because he is 21, unless he makes a demand for the money. It's common for a UGMA account to carry thru the college years, with the parent in control.

The money in the account is his. That includes the money you put in, as well as what the grandparents put in. Legally, you cannot transfer any of the money to an account in your name, without his consent. Even then, as others have said, it constitutes a gift from him to you, triggering gift tax rules. A gift can be in stocks. So, yes, he (you as custodian) can transfer the stocks to your account. His basis also transfers to you. So, there is no income tax until you sell the stocks.

Caveat: I am not a lawyer.