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New Member
posted Jul 11, 2020 2:52:55 PM

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?

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2 Replies
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.  

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.