I am non-US and my husband and daughter are USCs.
Previously we had a RESP with my husband as owner and filed a 3250 & 3250-A each year, reporting the CESG on his Schedule B as passive income. We closed that account and opened one in my name only.
First question: How should we classify this new RESP? Grantor or Non-grantor?
I'm leaning towards the former because it seems that a Non-grantor trust needs to file as a separate entity and I don't have a lot of time to learn a bunch of new reporting nonsense (1040NR maybe?).
Second question: If we choose Grantor, then it seems that I would be a foreign owner/trutee, with my daughter as a U.S. beneficiary... however, the 3520-A is intended for U.S. owners. Is my daughter considered an owner in some capacity? If not, then do we NOT have to file a 3520-A? Then how am I supposed to provide her with a Beneficiary statement?
Third question: My thinking in closing the RESP with my husband as owner and opening one with myself is so that the RESP income can be attributed to my daughter and not my husband directly. Then it could be reported either on my husband's 1040 with a 8814, or even on a separate 1040 for my daughter. Either of these appear to have no tax impact compared to my husband reporting the RESP income himself (less than $1000 annually). So am I crazy or would that work?
What trust type and owner should I choose for RESP?
Moderator: Mark T Serbinski CA CPA