IRS IRA Deposit Rule

Can I write a check and deposit it into my brothers IRA directly from my bank account. Or is there an IRS Rule that says he need to take possession of the funds first and then deposit them himself?



It is up to the custodian whether they will accept this IRA deposit. Many of them may not want to because they might be concerned that you are not aware of brother’s eligibility for a contribution, or that brother may have made a contribution to another IRA elsewhere. This would result in possible excess contributions, or recharacterization requests. Therefore, this is probably not the best idea.  



  • There is no statutory or regulatory restriction against you making the deposit on your brother’s behalf, but you need to make sure that your brother is aware of the contribution so that you can be sure that your brother is eligible to make the contribution and, if it’s a traditional IRA contribution, that your brother report the contribution correctly on his tax return.  Even if you make the deposit from your own funds, it’s still your brother’s contribution as if you gifted the money to your brother and your brother made the contribution.  Your brother will receive the Form 5498 that shows the contribution.
  • For example, it’s common for grandparents to make contributions on behalf of their grandchildren.  IRA custodians often promote this.


Would the rule stand the same if its my RMD from my IRA going directly into my brother Roth IRA as a contribution for him at the same custodian?



Yes, but it must be treated and reported as a taxable RMD for you, with the funds to be coded as a regular contribution for him, which he must be eligible to make by having earned income. In no sense could this be treated as a rollover.



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