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?
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?
Permalink Submitted by Alan - IRA critic on Fri, 2023-10-20 22:33
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.
Permalink Submitted by David Mertz on Fri, 2023-10-20 22:33
Permalink Submitted by David Mitchell on Sat, 2023-10-21 16:54
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?
Permalink Submitted by Alan - IRA critic on Sat, 2023-10-21 21:56
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.