1099-B for UTMA withdrew to pay tuition, does this need to be entered?
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?
02821
2 Replies
SusanY1
Expert Alumni
Jul 11, 2020 3:06:49 PM
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.
Hal_Al
Level 15
Jul 11, 2020 6:00:06 PM
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.