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Bob78164 Date: 7/14/99 6:00 PM Number: 17313
Assume that my income is too high to make an Education IRA contribution for the benefit of my son, and I don't want to deal with the hassle of having him fund his own Education IRA. So I find a willing and eligible relative (say, my sister), to whom I give $500 with the expectation that she will, in turn, fund my son's Education IRA to the tune of $500 (but not the legal obligation to do so). Is the "sham" aspect of this transaction any different from my proposal?

I'm not sure where this is going. Is the purpose to find a sequence of grays so close to the same shade as to be indistiguishible in adjacent pairs, so we can prove by trasitivity that black is white? I've already made my views known; no one is required to share them, and there very little chance that consideration of these cases will change them.

As my final contribution to this thread - yes this is an intermediate case. Less likely to be caught because there need be no record of the gift to the sister, and unlikely to be audited because the funding total has not been circumvented, and furthermore equivalent to the suggested legal approach of giving the money directly to the child to fund her own EIRA.
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