UTMA funds to Contribute to Roth IRA
We have a client who is a custodian of a UTMA account for their child. If the child has earned income and could contribute to a Roth IRA, could funds be taken from the UTMA and contribute to the Roth IRA? Both are still custodial, and will become the child’s at 21 years of age anyways. Thanks!
Permalink Submitted by Alan - IRA critic on Wed, 2022-06-08 23:41
Yes, the UTMA could fund a Roth contribution in this situation.
Permalink Submitted by William Tuttle on Thu, 2022-06-09 02:08
Keep in mind any unearned income from the UTMA account or other sources will be subject to Kiddie Tax rules.