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I believe you always have the option of making the child's IRA "non-deductible" even though he might qualify for it to be "deductible". Just fill out the necessary paper work with the child's 1997 tax return.

Your idea sounds good to me, but I certainly do not claim to be an expert. I have seen it recommended several places to buy a "non-deductible" IRA in 1997 and then convert to Roth early in 98 paying taxes on only the small gain if any.
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