I have an ITF account showing my son as beneficiary (my name ITF son name). I understand while was a minor all dividends, capital gains, etc were to be reported on my income tax. He is now over 18 and have been advised that the capital gains should be reported on his income tax.
How do I report this on my and my son's returns in TurboTax? Can someone help me out here?
I did find this information below from www.ldic.ca/resources/itfs-explained/ which makes sense, however, I don't know how to report it in TurboTax.
- What happens when the minor reaches age of majority?
Once the beneficiary reaches the age of majority, he or she becomes legally entitled to the account. It is expected that the trustee will work to have the account transferred directly into the beneficiary’s sole name. The transfer is non-taxable and must be completed by the time the beneficiary turns 31.
- How is an In-Trust-For Account taxed?
The trustee is responsible for filing tax returns for capital gains and income earned in an ITF account. Tax slips are issued with the trustee’s name and SIN, as well as the name of the beneficiary. The tax slip clearly indicates that the account is registered in trust for a beneficiary.
The Income Tax Act applies attribution rules to the income in an ITF account. Typically interest and dividends are taxed to the trustee and capital gains are taxes to the beneficiary. It is important that trustees work with tax specialists to fully understand the implications of holding an ITF account, and ensure tax filing is done accurately.
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