Hello,
I opened a custodial saving account (UGMA) for my 9 years old daughter. The initial contribution to the account is $100k, and it's invested in the stock market. With an assumed average interest rate of 10%, the account generates an annual income of approximately $10k.
My goal is for this account to sustain itself and cover its own tax liability, so I won't need to use personal funds.
I have two questions:
1- Considering these factors, do you believe it's possible for me to utilize the generated income from the account to cover its annual tax?
2- If this approach is feasible, would it be better to report the income under my own return or file a separate individual return under my daughter's name?
