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Author: rchristmann Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75809  
Subject: Education IRA for Nephew? Date: 12/15/1998 2:40 AM
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I am childless. Can I open an education IRA for my
nephew?
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7316 of 75809
Subject: Re: Education IRA for Nephew? Date: 12/15/1998 2:14 PM
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Greetings, Rchristmann, and welcome. You asked:

<<I am childless. Can I open an education IRA for my nephew?>>

You certainly can as long as he's younger than age 18. Take care, though, because only one $500 deposit to an EIRA may be made per year per child by everyone combined. Ensure his parents or another relative haven't already made such a deposit or you could end up with a tax hassle.

Regards…Pixy


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Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7319 of 75809
Subject: Re: Education IRA for Nephew? Date: 12/15/1998 2:23 PM
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You certainly can as long as he's younger than age 18. Take care, though, because only one $500 deposit to an EIRA may be made per year per child by everyone combined. Ensure his parents or another relative haven't already made such a deposit or you could end up with a tax hassle.

Some families do not discuss financial matters. If multiple EIRAs are opened up for a child, who is penalized? Is it based on date EIRA is started? What is the penalty?

..IF

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7321 of 75809
Subject: Re: Education IRA for Nephew? Date: 12/15/1998 4:29 PM
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IF asks:

<<Some families do not discuss financial matters. If multiple EIRAs are opened up for a child, who is penalized? Is it based on date EIRA is started? What is the penalty?>>

It's treated like any other excess contribution to an IRA. The penalty is 6% per year until the money is withdrawn, and it's assessed against the owner (i.e., whoever established it for the child). A 1998 EIRA receives the penalty if the excess contribution is not withdrawn prior to 4/15/99. As to who has to withdraw, I dunno. My presumption is the IRS will say the one started earliest is the allowable contribution, and any others have to be withdrawn.

Regards....Pixy

Regards....Pixy

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