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IRA xfer bonus offer gotchas
Old 03-09-2016, 10:10 AM   #1
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IRA xfer bonus offer gotchas

I've been reading the fine print of one of those "transfer your IRA to us and we'll give you a bonus" deals. This one says the bonus is put into the IRA as a contribution. But what if the IRA holder is not eligible to contribute (i.e. no earned income)? I suppose that means a withdrawal of excess contribution will be needed. And, if under age 59.5 the 10% early withdrawal penalty will apply, correct? Hmm, the bonus is not looking as attractive as it did initially.
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Old 03-09-2016, 11:32 AM   #2
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Every bonus I have received is put in the IRA as dividend earned, so no problems interfering with contribution limits. It does not show up on Form 5498 either.

You are basically reading too much into this and should not worry about it.
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Old 03-09-2016, 03:04 PM   #3
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Oh, it's not an assumption as the fine print of this offer clearly states the bonus will be treated as a contribution for the tax year. It sounds like various xfer offers handle the bonus in different ways. One that treats the bonus as a dividend is more appealing because it has less paperwork and taxes.
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Old 03-09-2016, 05:00 PM   #4
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Quote:
Originally Posted by GrayHare View Post
Oh, it's not an assumption as the fine print of this offer clearly states the bonus will be treated as a contribution for the tax year. It sounds like various xfer offers handle the bonus in different ways. One that treats the bonus as a dividend is more appealing because it has less paperwork and taxes.
Why not call them and clarify......if it is literally true ,they need to be informed that they are scaring the some of the target market away......and maybe they will change.
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Old 03-09-2016, 05:10 PM   #5
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Is this the Fidelity thing?
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Old 03-09-2016, 05:33 PM   #6
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Not Fido, it's a regional bank promoting their banc.
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