My contributions to my kids Roth IRA

Kurt V. Ullman

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Apr 17, 2017, 11:28:31 PM4/17/17

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For the last few years, I have been contributing to each of my adult
children's IRAs because they haven't had the money. I usually just
transfer it from my checking account to their IRA accounts bypassing
them entirely. Just got to thinking, is there any reason I shouldn't be
doing that.

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Stuart O. Bronstein

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Apr 18, 2017, 8:28:45 AM4/18/17

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"Kurt V. Ullman" <kurtu...@yahoo.com> wrote:

> For the last few years, I have been contributing to each of my
> adult children's IRAs because they haven't had the money. I
> usually just transfer it from my checking account to their IRA
> accounts bypassing them entirely. Just got to thinking, is there
> any reason I shouldn't be doing that.

Is anybody taking a deduction for the contributions?

--
Stu
http://DownToEarthLawyer.com

Alan

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Apr 18, 2017, 12:06:24 PM4/18/17

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On 4/17/2017 8:27 PM, Kurt V. Ullman wrote:
> For the last few years, I have been contributing to each of my adult
> children's IRAs because they haven't had the money. I usually just
> transfer it from my checking account to their IRA accounts bypassing
> them entirely. Just got to thinking, is there any reason I shouldn't be
> doing that.
>

Assuming your adult children had enough taxable compensation to allow
for a contribution, you are not precluded from making that contribution.
It is treated as a gift to your child and counts against the annual gift
tax exclusion. A side benefit to your child is that the contribution is
deemed to come from him/her, and if eligible, entitles him/her to the
IRA deduction if it is a traditional IRA. No deduction if a Roth IRA.

Kurt V. Ullman

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Apr 18, 2017, 12:16:34 PM4/18/17

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On 4/18/17 8:25 AM, Stuart O. Bronstein wrote:
> "Kurt V. Ullman" <kurtu...@yahoo.com> wrote:
>
>> For the last few years, I have been contributing to each of my
>> adult children's IRAs because they haven't had the money. I
>> usually just transfer it from my checking account to their IRA
>> accounts bypassing them entirely. Just got to thinking, is there
>> any reason I shouldn't be doing that.
>
> Is anybody taking a deduction for the contributions?
>

Nope. I don't and the kids know I'm doing it but I don't think it
registers and I know they haven't been. Also it is a Roth if that makes
any difference.

dvsarwate

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Apr 18, 2017, 12:16:34 PM4/18/17

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On Monday, April 17, 2017 at 10:28:31 PM UTC-5, Kurt V. Ullman wrote:
> For the last few years, I have been contributing to each of my adult
> children's IRAs because they haven't had the money. I usually just
> transfer it from my checking account to their IRA accounts bypassing
> them entirely. Just got to thinking, is there any reason I shouldn't be
> doing that.

Contributions to IRAs (whether Roth or Traditional) can be made only if the (unmarried) IRA _owner_ has had _compensation_ (salary or wages, self-employment income, commissions for sales, etc) and is limited to the smaller of the compensation and $5500 ($6500 if over age 50). Since you call your children your kids, I presume that they are unmarried. Are they also by any chance in college, and might well not have earned income in order to make an IRA contribution? If so, that is a bigger can of worms that you might have opened for your "kids". There is a 6% excise tax on excess contributions to IRAs.

Dilip Sarwate

Kurt V. Ullman

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Apr 18, 2017, 3:14:03 PM4/18/17

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On 4/18/17 12:14 PM, dvsarwate wrote:
> On Monday, April 17, 2017 at 10:28:31 PM UTC-5, Kurt V. Ullman wrote:
>> For the last few years, I have been contributing to each of my adult
>> children's IRAs because they haven't had the money. I usually just
>> transfer it from my checking account to their IRA accounts bypassing
>> them entirely. Just got to thinking, is there any reason I shouldn't be
>> doing that.
>
> Contributions to IRAs (whether Roth or Traditional) can be made only if the (unmarried) IRA _owner_ has had _compensation_ (salary or wages, self-employment income, commissions for sales, etc) and is limited to the smaller of the compensation and $5500 ($6500 if over age 50). Since you call your children your kids, I presume that they are unmarried. Are they also by any chance in college, and might well not have earned income in order to make an IRA contribution? If so, that is a bigger can of worms that you might have opened for your "kids". There is a 6% excise tax on excess contributions to IRAs.
>
> Dilip Sarwate
>

They are both near their 40s, unmarried, though, and both work full time
and so are well over the income limit.

Barry Margolin

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Apr 19, 2017, 11:12:40 AM4/19/17

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In article <iIydncFNEY3JjGvF...@earthlink.com>,

"Kurt V. Ullman" <kurtu...@yahoo.com> wrote:

> On 4/18/17 8:25 AM, Stuart O. Bronstein wrote:
> > "Kurt V. Ullman" <kurtu...@yahoo.com> wrote:
> >
> >> For the last few years, I have been contributing to each of my
> >> adult children's IRAs because they haven't had the money. I
> >> usually just transfer it from my checking account to their IRA
> >> accounts bypassing them entirely. Just got to thinking, is there
> >> any reason I shouldn't be doing that.
> >
> > Is anybody taking a deduction for the contributions?
> >
> Nope. I don't and the kids know I'm doing it but I don't think it
> registers and I know they haven't been. Also it is a Roth if that makes
> any difference.

It does -- there's no deduction for Roth contributions. Only regular IRA
contributions can be deducted, and only if your income is below the
limit.

--
Barry Margolin
Arlington, MA

bh2...@gmail.com

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Apr 24, 2017, 11:09:03 PM4/24/17

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On Monday, April 17, 2017 at 11:28:31 PM UTC-4, Kurt V. Ullman wrote:
> For the last few years, I have been contributing to each of my adult
> children's IRAs because they haven't had the money. I usually just
> transfer it from my checking account to their IRA accounts bypassing
> them entirely. Just got to thinking, is there any reason I shouldn't be
> doing that.

A great benefit is the IRS Tax Credit for retirement contributions. Even if you gifted the contribtion, they can tke it If they qualify, it is a very nice benefit. IRS form 8880

Mathedman

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Apr 25, 2017, 10:10:17 AM4/25/17

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On 4/17/2017 10:27 PM, Kurt V. Ullman wrote:
> For the last few years, I have been contributing to each of my adult
> children's IRAs because they haven't had the money. I usually just
> transfer it from my checking account to their IRA accounts bypassing
> them entirely. Just got to thinking, is there any reason I shouldn't be
> doing that.
>

Nothing wrong so long as you keep it within the limits of the gift
law. (Each hyear the IRS sets a "gift" limit. As I recall, it's
like $14,000. this year.

Stuart O. Bronstein

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Apr 25, 2017, 11:21:13 AM4/25/17

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Mathedman <Math...@hotmail.com> wrote:
> Kurt V. Ullman wrote:

>> For the last few years, I have been contributing to each of my
>> adult children's IRAs because they haven't had the money. I
>> usually just transfer it from my checking account to their IRA
>> accounts bypassing them entirely. Just got to thinking, is there
>> any reason I shouldn't be doing that.
>>
> Nothing wrong so long as you keep it within the limits of the gift
> law. (Each hyear the IRS sets a "gift" limit. As I recall, it's
> like $14,000. this year.

Conbgress set the gift tax annual exclusion amount. The IRS just
calculates the inflation factor.

--
Stu
http://DownToEarthLawyer.com