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Zaxis writes:

<<Oops, its a niece- 9 lbs, 12 oz. Mom had a rough time (she was in labor so long the pain killers wore off during the delivery) but everyone is okay.

I really was refering to an EIRA not an UGMA/UTMA. I read somewhere that if you exceed the maximum income level allowed for an EIRA you could give the kid the money and he/she could set up their own account. I don't know if this is possible, it seems a little odd to me since you can't set up an account if you are under 18.

I looked into a mutual fund that specialized in UGMA/UTMA accounts several years ago and my understanding was that whoever put money into the account had to pay gift tax on it no matter what the amount. I've never heard of getting a tax deduction for a gift to a relative. Are there any benefits to setting up a UGMA/UTMA instead of an EIRA (or maybe in addition to)? Would a tax return have to be filed each year? Aren't the capital gains still taxable even if she has no income?>>

From your posts I see you are confused about a whole host of issues in this area. The Motley Fool has a detailed section on Investing for Kids that may help you eliminate some of the confusion I see in your comments. You can find that information at

Do some reading there, and I think you may be able to answer many of these questions.

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