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I am considering transfering a Simple IRA account to my son's 529 education account. Am I subject to the 10% penalty if all of the money is not spent at once?

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John Stancil
You can't do a rollover of the IRA into the 529. It would be treated as a distribution from the IRA and subject to income taxes, and possibly an early distribution penalty. In addition, you may be confronted with the contribution limits for the 529 plan.
Leave a Comment 41 weeks ago

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Question Owner
I understand that I would be subject to incomes tax on the distribution. Do I need to contact the IRS to determine if I am subject to the penalty?
Reply 41 weeks ago
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John Stancil
I would not contact the IRS, you are not likely to get a straight answer. Talk with your tax or financial advisor. The answer depends on your age and other issue. You may be able to avoid a penalty by withdrawing up to $10,000 and use that amount for education expenses.
Reply 41 weeks ago


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