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For whatever reason, the IRS knows that this loophole is in the law regarding Ed IRAs, and have (it appears) decided to simply look the other way. With respect to gift tax issues, my experience is that they don't look the other way. Could IRS invoke the "substance vs. form" issue regarding the Ed IRA? Sure. Could they sustain that position? I'm not sure...at least the way the law is currently written. There has been no case law on the issue. But regarding gifts, there is plenty of case law that will support the IRS "substance vs. form" assertions.

Thanks for the response(s). Makes me think of a quote from Sheldon Banoff (whose name I have seen in relatively close proximity with Chris Riser's):

Substance controls over form, except where form controls over substance.
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