Had a client come in last night, told me "We forgot to tell you, we've been putting money in our IRA each year, we didnt know this would be a deduction."
They pull out the 5498s and I dont see any IRA contributions, just the FMV of the account that has sat at 60K for the past 5 years.
Then they pull out this list of payments they thought were being made to the IRA in all these weird amounts, multiple times per year.
I ask him how he came up with these dollar amounts and he says "that's what they told me to pay, me and a bunch of other investors are putting this money into our IRAs that are paying the premiums on life insurance contracts for people that are old and when they die, we get a payoff, so far nobody has died, but these people are all really old so Im sure money will be coming in soon"
Im sure his take on this isnt quite right...so far theyve paid over 22K to this "investment" in the past 5 years, but I dont see anything reflected in this IRA account.
Is this legit?