Custodial Brokerage Accounts

Hey Jeremy. I had a question regarding the benefits of opening up a custodial brokerage account for my kids (4 & 2). Would there be any tax implications for us or my kids while I’m investing in their accounts? Would we still get taxed if we invest and have the earnings be reinvested back into the account or until we sell and pull money out of the account.

Hey @johnny_rivera!

I’m not an expert in this area, as I don’t have kids. This link on investopedia does a good job giving an overview of the accounts:

It looks like there is a tax advantage, as any earnings are taxed at the child’s rate. Keep in mind that contributions to that account are irrevocable and automatically turn over to the child when they become an adult. You can always invest for yourself and gift money to your child later if you want more flexibility around that.