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"Can I transfer the monies from the mutual funds to this Ed IRA? How about a Roth IRA in her name?"

As previously mentioned, the shares must be sold before the money can be put into an Ed IRA or Roth IRA. Selling shares will likely create a taxable event. One way to mitigate the tax liability is to transfer all or a portion of the shares to your child and have her sell them. The first $700 of unearned income in her name is tax-free (child under age 14); the second $700 is taxed at her rate (probably 15%). So you could sell off a portion of the account on an annual basis and then invest the proceeds in an Education IRA account. Just keep in mind that assets in a child's name have liabilities when it comes to control at age of majority and in current financial aid formulas.

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