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I've been investing money over the years in UGMA's for my children's college education. My wife and I are the custodians on their accounts. In some reading I've been doing recently, it seams like this may not be the best thing. While the money is taxed at their rate and the first $650 is tax free, it hurts them when it comes time to apply for grants and loans.

A better approach might be to put the money in mine and my wife's Roth IRA. There it can grow tax free and we can withdraw it without penalty to pay for their college.

My question is, can I take the money from their UGMA accounts and place it in my Roth IRA? Are their any consequences to doing this? Tax or otherwise? How will the IRS view this? Do they care?

Thanks in advance,
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