Investing for a minor
Hi I think you had written in the past about investing for minor My understanding is that you can open a broker account in your name, as trustee for the minor. My understanding is that the TFN to be provided for the holdings within this account is your own TFN, and that once the minor turns 18, you can transfer the holdings into their own account in their own right, without incurring a capital gain issue when the holdings are transfered into their own names. Income from dividends and distributions, and taxes, are incurred in the name of the adult who open the account (as trustee for the minor, and not in the name of the minors ) Correct me if I am wrong I have had conflicting information about the above from various people. Some said that yes you can open an account as trustee for the minor and yes there is no capital gain tax issue when the holdings are eventually transferred to the minor as there is no change in beneficiary, but the income in the interim are still the responsibility of the minors with a very high tax rate once the unearned income or distribution exceed 400 dollars, whereas others said that the income and distribution are the responsibility of the adult until the holdings are transferred to the minor upone them turning to 18 and therefore be taxed at the adult's marginal tax rate Could you clarify which of the above scenario is correct ?
