Discussion:COURT BLOCKED ACCOUNTS FOR MINORS
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Discussion Forum Index --> Advanced Tax Questions --> COURT BLOCKED ACCOUNTS FOR MINORS
Discussion Forum Index --> Tax Questions --> COURT BLOCKED ACCOUNTS FOR MINORS
| 20 February 2008 | |
| A pension distribution is given to a minor child with the money placed in a court blocked account. The money is not accessible until the child turns 18. The company issuing the distribution reported the payout on a Form 1099R to the child. Can this distribution be tax deferred until the child turns 18? | |
| 20 February 2008 | |
| No. Taxed now. Find a way to pay it. If it's a stonkingly massive amount, and could never reasonably be paid before age 18 under any circumstances, discuss the case with the lawyer in charge of putting the block on the account to see how to arrange a release to pay tax. If a release can be made to pay tax, you will have to file a tax return for the child, rather than including the income on the parents' returns. They aren't going to do a release for a small amount, as it's a heck of a lot of legal work and someone (probably the child's parents) will have to pay for the legal work. | |
| 29 March 2008 | |
| I'm in a similar situation with a client. Not too worried about the 'blocked account' Worse comes to worse I'll tell parent to file the return and send the unpaid bill to the court or trustee to pay. They can tell the IRS to wait! LOL.
Anyway, any ideas on deferment, averaging, anything? Have seached, came up empty except to say to them they should have called before the distribution. Might have been able to get half one year and half the next. This particular case is 6 digits gross, 5 digit tax due, AMT, etc. Thanks | |
RoyDaleOne (talk|edits) said: | 30 March 2008 |
| The possible attack against this is there is no constructive receipt of the money. There are court imposed restrictions on
the receipt of the money, therefore, the taxpayer has not received the money, or the right to the money. You can go from here. | |
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