Taxes are the part of kids' investing parents discover late — usually the first year a custodial account throws off enough dividends to generate a form nobody expected.
The rules aren't obvious. A child's unearned income is taxed on its own schedule, and past a threshold it can be taxed at the parents' rate. Gifting appreciated stock to a grandchild works differently from gifting cash. Selling inside a custodial account in a low-income year can be an opportunity rather than a cost. And shares a child inherits are taxed differently from shares a child is given.
These guides cover the mechanics in plain English, with current thresholds stated plainly so you can see what applies to you. Tax rules change and interact with the rest of your return in ways a guide can't see — read these to know which questions to ask, then ask a tax professional the ones that matter.
Step-Up in Basis, Explained: What Your Kids Actually Inherit (and What They Don't)
Inherited stock resets to market value at death. Which of your kid’s accounts get that reset, which don’t, and what the viral version leaves out.
Federally Tax-Free Isn't Always State Tax-Free: 529 Withdrawals and Your State
Federal tax-free isn't always state tax-free: state penalties, income tax on earnings, and deduction recapture on 529 withdrawals.
Gifting Appreciated Stock to Grandkids: The Tax-Smart Way to Give
Give the shares, not the cash. How gifting appreciated stock can move a gain into a grandchild's low bracket — and the kiddie-tax trap to avoid.
UTMA Taxes: Do You Pay Tax on a Custodial Account?
How a UTMA/UGMA is taxed — who owes it, what's taxable, the 2026 kiddie-tax thresholds, capital gains, reporting, and how a Roth or 529 differs.
Gift Tax and Custodial Accounts: The Annual Exclusion, Explained
Funding a kid's account is a gift — but the gift tax rarely costs a normal family a thing. The annual exclusion, explained.
Tax-Gain Harvesting in a UTMA: Resetting Cost Basis Tax-Free
Use the kiddie-tax thresholds on purpose — realize long-term gains each year to step up cost basis at a 0% rate.
The Kiddie Tax, Explained: What Every Custodial-Account Parent Should Know
Who it applies to, the 2026 thresholds, which accounts trigger it, and how to keep the bill small.
Other topics
The rest of the library, grouped the same way.
Accounts
20The account types that hold your kid's money — and how each one works.
Strategy
29How to choose between accounts and make the most of what you open.
Basics
16Investing fundamentals in plain English — simple enough to learn and teach at the same time.
Parenting
14Turning the numbers into lessons your kids actually absorb.
Milestones
9What to do at the moments that matter — birth, first job, turning 18.