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One of the options is to roll it over into an IRA. I've been considering starting a
Roth IRA as a means of funding my kids college (twin 1yr olds).

1. Can I put all, or the vast majority, of the ESOP money directly into this
account "tax free" or will it be subject to the $2000 limit?

2. Can I split this money, once again tax free, between a Roth IRA for myself
and one for my wife?

Here's what I think (but remember, I'm just a civilian in these tax matters.)

I'm assuming that the plan is correct that you can roll these funds over into an IRA.

If you can, that would be a traditional IRA, and in your name.

That means to roll it over into a Roth IRA you'll have to pay taxes on it. (Traditional IRAs are made out of pre-tax dollars, Roth IRAs contain post-tax dollars, so ya gotta pay the tax.) The good news is that since it's coming from an IRA, you can roll over all of the monies, not subject to the $2000 contribution cap.

Since this would be an Individual retirement account, you couldn't split the IRA account with your wife. Doesn't work that way.

However, if your goal is to give some money to your wife's Roth IRA, you might be able to take some of the money as income, in which case you'd have to pay taxes on it, but you could use it to fund your wife's Roth IRA (up to $2000) and your son's Education IRA (up to $500 if you meet the income caps).

Hope this helps!
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