Can parents gift their Roth IRA to a child?

[Guest ednav]

Can parents gift their Roth IRA to a child? For instance, can both parents and the child open a Roth for $2,000 each, then after 5 years remove the $6,000 basis to pay tuition costs and gift the interest remainder to the child for his retirement? If so, what are the tax implications of doing so?

[BPickerCPA]

You cannot gift an IRA. IF they withdraw their Roth IRA earnings and gift the proceeds they will be taxed and subject to the 10% early withdrawal tax on the Roth IRA earning.

[John G]

While you can not gift an IRA to a child, a child with earned income (paper route, babysitting, fast food worker, etc) can have an IRA and the IRA can be funded by the parents. Also, you can set up an educational IRA for a child and contribute $500 per year. The education IRA has some limitations and drawbacks that you need to review before creating one.

Also, the original question seems to suggests that three people might open one IRA account. No, no, no. An IRA account is "Individual" and owned by just one person. So, two adults and a child will never "share" and account.