Heroux & Compnay LLP
Tip of the Month for June 2000
Contributions To Your Children's IRA
TIP OF THE MONTH
If you have an IRA for your son or daughter, you can contribute to it without penalty - up to a point. If your child runs short of cash in a given year, you can give them the $2,000 contribution - BUT - the $2,000 will count against the $10,000 per person, per year, limit that you can give in gifts without having to file a gift tax return with the IRS. ALSO, if you go over the $10,000 gift limit to one of your children in a given year, for any reason, the amount above $10,000 will be deducted from your "life time exclusion" of $675,000, which is the maximum amount you can pass on to heirs without incurring a tax liability.
If you have an IRA for your son or daughter, you can contribute to it without penalty - up to a point. If your child runs short of cash in a given year, you can give them the $2,000 contribution - BUT - the $2,000 will count against the $10,000 per person, per year, limit that you can give in gifts without having to file a gift tax return with the IRS. ALSO, if you go over the $10,000 gift limit to one of your children in a given year, for any reason, the amount above $10,000 will be deducted from your "life time exclusion" of $675,000, which is the maximum amount you can pass on to heirs without incurring a tax liability.
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