Situation:

Minor Child, Jane has account with Mom. Jane's mom and dad are divorced.

Paternal Grandma comes in and opens account in her's and Jane's name.

1099 is sent at the end of the year under Jane's SS# to Jane's address, Mom sees an amount greater than expected due to account with g'ma.

Not sure how this hasn't come up in the past, but it seems to cause many issues.

Any suggestions?

What issues?

Grandma could legitimately open a UTMA account using the child's name and SSN, but not a joint account. Mom's permission would not be necessary. As the custodian, grandma could certify the TIN. If your bank allowed grandma to open any other type of account using the child's TIN, you messed up and you need to fix it.

An interest bearing account would increase the amount of interest paid and thus taxable to the child. If the child's earnings were enough to require the filing of a tax return then her tax liability would be increased. In today's interest rate market, it would take a pretty hefty deposit to prompt a change in the child's tax liability. As a parent, I would not beef if my former in-laws set aside that much money for my child.

Maybe they are just not done hating each other?

Ken, you said "As the custodian, grandma could certify the TIN."

The TIN certification is under penalty of perjury. I thought that required the signature of the owner (the child), and if the child is not old enough, then the certification would have to come from the custodian of the child (the parent or guardian). Here, grandma is the custodian of the funds (the "estate"?), not of the child.

Al

1099 will state each account number and the amount of interest earned for each. It goes to the child, so mom would see the information for the other account.

Ken, could I bump my question of 11/21, please.

Al