How much can a minor contribute to a custodial brokerage account?

However, any contributions over the annual gift tax limit will be subject to federal gift tax. In 2024, that limit is $18,000 per person. Contributions to a custodial brokerage account are considered irrevocable gifts, meaning once they go in, they can only be used for the minor's benefit.

What is a custodial brokerage account?

This includes medical expenses, basic life needs and other essential needs, says Jason Steeno, president of CoreCap Investments and CoreCap Advisors in Southfield, Michigan. There are two types of custodial brokerage accounts: UGMAs and UTMAs. The main difference between the two is the type of assets that can be held in each account.

Who can open a custodial brokerage account?

Typically, custodial brokerage accounts are opened by parents or grandparents who want to save for a child's future or make financial gifts to a child. Anyone can contribute to the account, not just the account owner, and there is no limit on how much you can contribute in a given year.