Feb 23

Question by Green12345: How can I start a Roth IRA with my money?
I want to open a Roth IRA with a check I received as gift. However, it is greater than my annual income.

I know that money contributed to a Roth IRA must be taxable income. Is there a legal way around this?

Best answer:

Answer by The Son of Rage and Love
No there isn’t a “way around it” – sheeez, it seems like all I see on Yahoo Answers are people looking for some way to beat or scam the system. There are limits on how much you can put annually into a Roth or any IRA for that matter. No mutual fund company or bank will take more than that limit.

What do you think? Answer below!

one comment so far...

  • Uncle Leo Said on February 23rd, 2011 at 5:45 pm:

    It’s okay to use money from the gift to fund the Roth IRA. But the amount you put into the Roth is limited by two factors. First, you can’t contribute more than your taxable income. So, if the gift is $ 4,000 but your taxable income for the year is $ 2,500, all you can put into the Roth is $ 2,500. Second, there is a limit of $ 5,000 on contributions to an IRA (or $ 6,000 if you’re 50 or older), even if your taxable income is higher.

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