Hello - I have an UTMA set up for my son. It's invested in mutual funds and has done very well. This year I've taken several distributions for the benefit of my son that total around $20k. Much of that is cap gains. He just turned 18 this year and started working, so he has his own tax forms to fill out.

My question is how are the gains from the distributions taxed? Do I report them on my tax forms and get hit at my tax rate? Or can they be taxed at his rate, which is much lower since he has income <$3k?

Also, now that he's age of majority, should I re-register the account in his name solely? What are the benefits/drawbacks from doing that?

Thank you!