u/Choice-Sorbet-5019

I apologize in advance for being so slow with understanding how taxes work for my son’s UTMA.

My main question is, if I don’t sell anything in the account until he reaches age of transfer which is 21 in my state, will we owe one giant tax bill at the end on capital gains?

Or, are we taxed annually on unrealized gains in the account regardless of whether we sold or “cashed out” anything and therefore, won’t have a giant tax bill when he comes of age?

I am aware of the $1,350 tax exempt portion but just confused on when we will actually have to pay taxes and whether selling triggers taxes or if we pay them annually regardless. Thank you for any guidance and patience with my lack of knowledge!