Investors & landlords

don't confuse what goes into the account with what comes out of the account.

 

what goes INTO the account is a gift.

 

what comes out is potentially taxable.

 

Let's say grandparents gave $100 each year to the child all the way through high school.  Those are gifts

 

Let's say the money was invested in Apple stock and by the time the child was ready go to college, it was worth ALOT of money.  The stock was sold to fund the college education.

 

the broker would issue a 1099-B and the profit on those stock sales is taxable income

 

make sense?