1 Answer. An UGMA/UTMA custodial account is a special type of account that allows a minor child to legally hold money or other property, such as stock or real estate, that the child would not otherwise be able to hold in his or her own name.What does UGMA stand for?
UGMA stands for Uniform Gift to Minors Act, while UTMA stands for Uniform Transfer to Minors Act. UTMA allows for more maturity time before handing to it over to the beneficiary (up to 25 years), depending on the state, while the UGMA matures at 18 years.Are UGMA contributions tax deductible?
UGMA/UTMA Contributions. Contributions can be made by the minor or anyone else. Contributions are not tax-deductible, however, you can give up to $14,000 (2017) or $15,000 (2018) a year ($28,000 (2017) or $30,000 (2018) for a married couple filing jointly) without incurring federal gift tax.