My father sent me a 1099-B & 1099-div for custodial mutual fund he manages, I didn't even know existed, I have already filed & received my return, do I have to amend?

[aituzzip]

I found out the accounts were set up when I was 10 years old. For the last 20 years (yes I am 30) this account was not touched.  Recently he sent me a personal check for 5k for an upcoming wedding.  After I filed my taxes like I do every year, I have two 1099-div and one 1099-B

Now I have a 1099-B that states: 

BOX 6 Gross Proceeds 0.00$ 

BOX 4 Federal Taxes withheld $0.0

1099-DIV Cornerstone MOD Aggressive 

BOX 1a Ordinary Dividends $158.47 

BOX 1b Qualified Dividends $22.61

BOX 2a Total Capital Gains $176.80

1099-DIV Growth Fund

BOX 1a Ordinary Dividends $72.61

BOX 1b Qualified Dividends $53.53

BOX 2a Total Capital Gains $203.99 

I will amend and file these doc, but most importantly how URGENT is it that I amend?  What is even taxable on these forms? 

[rjs · Accepted solution]

All the items on the 1099-DIV forms are taxable. The 1099-B appears to have no transactions. You can ignore it. (Financial institutions typically send out a consolidated statement that contains sections for every possible 1099-series form, even if some of the forms have no income and are all zeros.)

You do have to amend your tax return, but you don't have to panic about it. The amended return forms for 2018 are currently expected to be available on March 7. Also, you should not amend until after your original tax return has been processed by the IRS and you have received the refund, if any.

It's not clear where the $5,000 for the wedding came from. If it came from this custodial account, something had to be sold to obtain the money, but the 1099-B does not show any sales. It might have come from a money-market fund, which does not have to be reported. Or was it a gift from your father, from his own funds?

A custodial account is for a minor child, who cannot own or manage his or her own investments. But the money is yours. Your father should have turned it over to you years ago. You should ask him to transfer it to an account in your own name, with your address, and give you control of the account. This can be done without selling any of the mutual funds, so it does not trigger any taxes.

[aituzzip]

Thank you, there was a bit of information on the 1099-b on a second page but the form stated it was a summary for informational purposes. I didn't know if this was part of the doc or a courtesy of the bank.  Long term E-basis not reported to IRS. BOX Id Proceeds- $5000, BOX Ie Cost or Basis - $4457.03, box Ig Wash - 0.0, and Net Capital Gains - $542.97.  
My father said it was from this account that the check came from but when he "withdrew" the check was made out to him.  He also claimed that if he was to transfer into my funds I would have "many tax implications." I am very much in the dark about the details and I'm unfamiliar whit these types of accounts.

[rjs]

I didn't look carefully at the 1099-B information in your original question. Box 6 on Form 1099-B is a check box, not an amount. The proceeds of the sale are in box 1d. Obviously there was a sale with proceeds of $5,000 and a gain (profit) of $542.97. So that sale does have to be reported on your (amended) tax return, and the $542.97 gain is taxable income to you. It's a long-term capital gain, which is taxed at lower rates than ordinary income.

As I said earlier, the title on the account can be changed to your name without any tax consequences. Nothing is sold, and there is nothing to report on your tax return. The financial institution where the account is held is surely familiar with how to do this, and I'm sure they do it very frequently. Your father may be resisting turning it over to you as a way of maintaining control, or because he thinks of the account as a tax shelter for himself and never really intended to give you the money, or perhaps because he doesn't trust you with the money.

You may find the following articles helpful. The first article is a general introduction to custodial accounts. The second article discusses the child's right to the money upon reaching adulthood.

<a rel="nofollow" target="_blank" href="https://fairmark.com/kids-and-college/utma/custodial-accounts-101/">https://fairmark.com/kids-and-co...>

<a rel="nofollow" target="_blank" href="https://fairmark.com/kids-and-college/utma/the-minors-right-to-the-money/">https://fairmark.com/kids...>