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Can I fund an IRA CD with gift money or foreign money?
Question : Can I fund an IRA CD with gift money or foreign money?
A friend bought me an IRA CD for 5K for tax year 2008. I had no income in 2008, other than interest earned on CD’s and savings accounts. The IRS doesn’t allow you to have an IRA CD if you have no income, and you’re not allowed to fund it with bank interest earned. Does the IRS allow you to fund an IRA CD with gift money, or foreign money (my friend is foreign) without any kind of penalty?
ira cd
Best answer:
Answer by Mark of Laughlin
go to www.irs.gov for the amazing and fun filled answer!
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#2 written by MoneyMann 1 year ago
You must have earned income (wages, net self employment, commission, etc) to fund an IRA. The IRS-imposed penalty for over-funding an IRA is 6% per year, until withdrawn.
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Disclaimer. The information in this response is for general purposes only, and shall not be construed as specific tax, legal, or investment advice for any individual. The questioner is urged to contact their own professional advisors before implementing any tax or investment strategy.
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You can only fund an IRA with earned income. You can have an IRA whether you made income or not, but it can only be funded by earned income (legal income) such as wages, tips, and commissions.