Post 70 1/2 2007 IRA Contribution
Client turned 70 1/2 on February 1, 2008; wants to make an IRA contribution for 2007. Custodian is refusing to accept it, which does not seem right. Opinions?
Client turned 70 1/2 on February 1, 2008; wants to make an IRA contribution for 2007. Custodian is refusing to accept it, which does not seem right. Opinions?
Permalink Submitted by Al Fry on Tue, 2008-04-15 15:35
In readong Pub. 590, one cannot make a contribution for the year that they turned 70 1/2, so custodian is incorrect for NIGO-ing contribution, in my opinion.
Permalink Submitted by Denise Appleby on Tue, 2008-04-15 16:48
Custodian is wrong. [url=http://www.law.cornell.edu/uscode/search/display.html?terms=219&url=/usc… IRC Sec. 219(d)(1).[/url]
Permalink Submitted by Alan Spross on Tue, 2008-04-15 16:59
Since there are only a few hours left to convince the custodian they are wrong, client may be forced to make a Roth contribution if income eligible and have the custodian recharacterize it when they finally see the light. Since they will have to recharacterize it, if the TIRA contribution is deductible, there is little risk of taking the deduction on the 2007 return if client is filing today. In fact, client must file the return or extension by today in order to be able to recharacterize the contribution.
Permalink Submitted by Al Fry on Tue, 2008-04-15 17:15
TKU. They wired it today.