TIRA deposited into UGMA minor account
I mailed an IRA contribution with an 8.5×11 Individual Retirement Account Deposit Slip with Traditional IRA box checked and the appropriate year (2015). Just learning My IRA Custodian deposited this check into my daughter’s regular account (UGMA). This is causing tax consequences of almost $3,000.00. Waiting for copies of check and deposit slip, but the brokerage firm has told me verbally that the wrong account number was on the check and they were having trouble locating the actual deposit slip.. Is the custodian responsible for not putting it in an IRA account and should have contacted me with the account number not being an IRA account or am I 100% at fault for putting the wrong account number? Any opinions would be appreciated.
Permalink Submitted by Alan - IRA critic on Sun, 2017-10-01 02:29
Errors of this nature must be discovered promptly and brought to the custodian’s attention in order to have any chance of getting them corrected. IRS reporting of contributions is done in May of the year following the contribution year on Form 5498. Your IRA statements, year end account value reported to you in January, and the missing 5498 in May were all red flags of an error that you evidently missed for several months. Even if you could show that this was entirely the custodian’s error at this late day, their legal Dept would likely take the position that you should have notified them within a reasonable time. Not much you can do about this now. 3,000 seems very high for not being able to take a TIRA Deduction since most high bracket taxpayers cannot deduct a TIRA Contribution anyway. Are you sure that figure is correct?