Accountant Forums

Thread Tools

Does a Change of 529 Plan Beneficiary Have Gift Tax Consequences?

Tom Russ
Posts: n/a
      11-05-2008, 03:51 AM
The contribution of money into a 529 plan for college expenses clearly
has some gift tax consequences, and even some special rules (like the
5-year consolidation option). But 529 plans also remain under the
control of the donor, who can designate a different beneficiary for
the 529 plan.

Let's assume, that some time has passed from the initial funding of
the plan, and the amount of money has grown. For the sake of argument
assume the balance is now $100,000.

So, my question is whether changing the beneficiary has any gift tax
consequences. Does this count as a gift of the amount of the account
that has the beneficiary redesignated?

And if not, does that provide a way* around the annual limit, by
setting up multiple accounts for nieces, nephews, etc. and then later
changing the beneficiary to one's own child?


* OK, it is a cumbersome way around it, is not an unencumbered gift
(due to 529 plan rules), and carries some risk of the donor dying
before the change is made, but still.

(Inspired by another post, but a different issue).

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
Reply With Quote

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
QHEE not for 529 beneficiary of record Frosty Tax 3 11-14-2006 01:09 AM
tax consequences for changing 529 beneficiary Financial Planning 4 10-31-2006 10:42 PM
Invest in 529 plan before you even have a child? Financial Planning 3 09-17-2006 03:39 AM
529 Plan Beneficiary Dies: Now What? Ollie W. Holmes Tax 1 12-05-2004 04:06 AM
IRA beneficiary of a beneficiary johnny dough Financial Planning 6 02-06-2004 06:14 PM

All times are GMT. The time now is 04:27 PM.
Posts in this forum do not constitute the advice of or its members. Financial advice should always be taken from qualified advisors before committing to a financial decision.