My daughter has a mutual fund of about 7000.00 since recent events with the stock market she has lost 3000.00. She starts college next year and l am fear full that the money wo not be there when she really needs it. My question is she allowed to cash it out. Or am l allowed to, being the custodial parent. Also if we do will we have to pay a hefty tax on it at the end of the year. l am really unsure of what to do here. If the stock market continues to do poorly over the next several months could she possibly lose all of her money even the initial investment amount? Thanks

If yu sell sum av the munee in the akkount, mutual fund will send a 1099 in January that sho NE part av it that is kapital gaen or loss & NE dividend it mite inklued.

please talk to ur accountant. She wo not have taxes on a loss if u sell it. However, if u keep it, u might have tax consequences even though the mutual fund is down. it depends if u put it in a qualified 529 college fund--since u have not said how the mutual fund was set up, please call an accountant for good advice based on ur personal circumstances.

If u do nothing, it might come back some. A mutual fund is not an appropriate short-term investment for a child who needs the money next year. This is an investment for decades, where it wo not be touched. And, yes, the market could go down further. She will not actually lose the shares unless u sell them, then the loss is permanent & real. Good luck to u all. l can really sympathize. My child graduated college last year. It was very expensive. It is really hard to watch the market go down & ur daughter is balance shrink, right when she will need it. l hope u leave it & wait & see if the market improves. It may take awhile, though.