Q. Am I better off buying CDs in the names of my 9- and 13-year-old daughters?

A.There is no advantage to buying CDs in your children's names as far as taxes go and it could be a disadvantage down the road with regard to getting student loans and grants for college.

The fewer assets students have in their name, the better chance they have of qualifying for financial aid. (Tax-exempt 529 savings plans are an exception to that rule. Put all the money you can in those.)

We talked to an income tax preparer and talked to an IRS representative. The consensus is that you must include the interest your child earns on a CD on your own income tax return, assuming the interest is less than $8,500 and the child is under 18 years of age. If it is more than this you must file an income tax return for the child.

You'll find the regulations on how this income must be reported on page 6 of IRS publication 929.