Gyroscopic Investing

I am thinking about putting Long term bond and shot term bond (cash) in UGMA account.

Treasury bonds are exempt from state and local tax. And in UGMA, the first $950 gain is exempt from Federal income tax. So if bond/cash stay in UGMA, it's close to tax free.

And the UGMA withdrawal rules are very flexible, you can claim you withdraw the money for the any benefit of kids. So rebalancing is not a problem.

Any thought?

It sounds like what you are talking about involves a potential bending of the law, which I would stay away from doing.

Also, in your approach there is no mechanism for harvesting capital gains in your bond holdings, which are typically where much of your bond gains come from when interest rates are falling.

No sir. I am thinking about using UGMA to fund my kids future.

Initially I wanted to put Stocks and Bonds into UGMA account. But then I realized I could not take stock loss into tax deduction in a UGMA account.

MediumTex wrote: It sounds like what you are talking about involves a potential bending of the law, which I would stay away from doing.

Also, in your approach there is no mechanism for harvesting capital gains in your bond holdings, which are typically where much of your bond gains come from when interest rates are falling.

neil wrote: And the UGMA withdrawal rules are very flexible, you can claim you withdraw the money for the benefit of kids.

Sorry, I must have misunderstood the way you were using the word "claim."