What is the key difference between UGMA and UTMA?

UGMA (Uniform Gifts to Minors Act) is limited to financial cash, stocks, and bonds and transfers at age 18. UTMA (Uniform Transfers to Minors Act) allows any asset including real estate, fine art, and patents, and typically transfers at age 21.

Updated: August 2026 • Verified v1.2

Custodial Account (UGMA/UTMA) Growth & Kiddie Tax Calculator

Finance & MathPopular

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FV = PV*(1+r/12)^(12*y) + PMT*(((1+r/12)^(12*y) - 1)/(r/12)); KiddieTax evaluated on unearned income brackets ($1,300 thresholds)

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Understanding Your Results

Calculates future custodial account value at legal transfer age, total deposited principal, compound growth, and estimates annual IRS Kiddie Tax across tax-free, child-rate, and parent-rate brackets.

Practical Guidance & Next Steps

Unlike a 529 plan, custodial assets become the irrevocable property of the beneficiary at the age of majority to spend on anything.

What is this?

A wealth transfer utility that models custodial account compound growth and IRS Kiddie Tax obligations for minors.

How does it work?

1. Enter child's age, transfer age (18 or 21), initial principal, and monthly deposit. 2. Select parent's marginal tax bracket. 3. View projected account balance at adulthood and estimated annual Kiddie Tax.

Why use it?

Helps parents plan generational wealth transfers while understanding minor tax liabilities.

Technical Scope & Calculation Limitations

Models standard IRS Form 8615 unearned income rules.

Frequently Asked Questions

The Kiddie Tax prevents parents from avoiding taxes by transferring investment assets to children. The first $1,300 of a child's unearned income is tax-free, the next $1,300 is taxed at the child's rate (10%), and any excess is taxed at the parents' marginal rate.

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