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I have common stock I purchased for my then minor daughter that I want to give to her now that she is an adult. It is listed in my name as custodian with her name listed under the UTTMA - uniform transfer to minors act. If she sells the stock, will there be a federal tax liability for either of us?
ANSWER
Expert William Richmond's Answer:
Under most of the UGMA/UTMA rules, your daughter automatically becomes the legal owner of the stock when she reaches the age of majority. If she sells the stock, she will have gain or loss in the amount of the sale proceeds less her basis. Her basis should be the amount you paid for the stock when purchased.
