Conference nyoss1::market_investing

    	You will want Form 8615, to attach to (most likely) a 1040A for
    your dependent.  It's not difficult UNLESS you have more than one
    dependent in that situation in which case it can be confusing, but
    still manageable.  Because of a peculiarity in the tax laws, this is
    better than filing form 8814 (which will cost you a few dollars more).
    You might want to try the calculations both ways to see whether there
    is a big difference for you.
    
    Dave Eklund
    P. S.  In publication 17 the relevant section is 32 beginning on page 181.

Re. -1

	Thanks, you are right. I got thru to the IRS hotline and they stated 
about the same. The UTMA earned over $550 and less than $1100 in int/div, so 
I have two options.

	a) File form 8614 and attach to our return, Thus no return for minor 
           child.

	b) File a 1040 or 1040a for the minor child, form 8615 is not required
	   since less than $1100 int/div was earned.

	I computed both ways and as you said "b" was a few dollars less.

    Hi out there I am a bigginig investor and I enjoy reading all the good
    sugestions in this file.
    
    I have a question on UGMA.
    
    How do I find out more about an UGMA and where can I find out? I would
    like to start one for each on my children to help in the College fund as
    they grow to that age.
    
    Any and all suggestions are welcome. 
    
    Thanks in advance
    Frank

Depending on which state you live you will be able to set up either a UGMA or a
UTMA. You could start by visiting your local library and asking for help at
the reference desk for information on Uniform Gift to Minors Act or Uniform
Transfer to Minors Act. Also most mutual fund companies can send you info, but
they tend to dwell on how to set one up not what a UGMA/UTMA is. Some 
financial planning/estate planning books have chapters on this, also found
at your local library.

UGMA/UTMA are basicly custodial accounts for your child. They provide a way
to give money to a child and obtain tax benefits. The key word is "give", as
all money invested in a custodial account is considered an irrevocable gift.
The custodian retains control of the account until the child reaches adulthood
(generally 18 or 21 in most states) at which time the child is free to chose
how to spend it. Most states limit withdrawls prior to adulthood to educational
related expenses. The tax benefits under current laws are:

	. The first $550 of total income earned by the child
	  (int,div,cap gains, etc) is tax-free
	
	. Income earned between $550 and $1100 is taxed at the childs rate (15%).

	. Income over $1100 is taxed at the parentls rate until the child
	  turns 14, then all income is taxed at the child's rate.

Payments into UGMA/UTMA accounts can be lump sums whenever you have some 
spare funds or you can set up a periodic investment plan such as monthly,
quarterly, yearly.
 
Another way to build for college and avoid the UGMA/UTMA restrictions is to 
set up a periodic investment account under your name. However you will lose
the tax benefits and all income earned would be taxed at your rates.

The latest numbers I have seen on college costs are from 1991. The average cost
of four years of college at a public school in the U.S. is $22,000 and the 
average cost of a private school is $56,000.

Most college planning guidelines I have seem tell you to plan for college costs
to increase between 6% to 8% per year. So if your child is 1 now and you plan
to have them attend a public college when they turn 18 (17 years from now) your
looking at about $59K at 6% ($22K x 1.06*17)or $88K at 8%(22k x 1.08*17).

The following table is useful for computing a monthly periodic investment 
assuming a 10% pretax return.

	Years		Goal		Goal		Goal
	until		25K		50K		100K
	college
	-----------------------------------------------------------
	17		$47		$ 94		$188
	15		 60		 121		 241
	12		 90		 122		 362
	10		122		 244		 488
	 5		323		 646		1,291
	 2		945		1,891		3,781

    Old topic, new question:
    
    I was the recipient of a UGMA gift of stock some thirty years ago. Last
    year, I finally sold that stock.  The question:  How are the capital
    gains calculated for this sale?  
    
    Many thanks for any info.
    
    /john