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Author: rchristmann Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75383  
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 75383
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 Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7319 of 75383
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 75383
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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