removeps-groups[at]yahoo.com wrote:
- quote -

QTP (Qualified Tuition Plans) work.

All contributions are after-tax. Therefore, to the extent that
any distribution not used for qualified expenses contains a part
of the contributions, that part would not be taxable (it's a
return of principal). That part which is earnings on the account
is taxable and subject to the 10% additional tax penalty.

Once you have the funds, you are free to do anything you want
those funds.

Pub 970 explains how one calculates the taxable part of any
distribution, and it also identifies any exceptions to the 10%
penalty. You are not allowed to just withdraw your contributions.

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On Nov 22, 11:28 am, Alan <sfcnm-...[at]yahoo.com> wrote:
- quote -

What if you want to pull out all of money from the 529 and give to a
charity. Will there be penalties, and will you get the full tax
deduction?

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removeps-groups[at]yahoo.com wrote:
- quote -

Then you have made a gift equal to the value of the account.
Normal gift tax rules apply. If the amount is in excess of
$13,000 (2009 exclusion) to the new beneficiary then you must
file a gift tax return and pay gift tax or use up some part of
your lifetime exemption.

- quote -

You've lost me. The account owner can only be an individual or a
trust if the 529 plan allows an account owner to be a trust. The
funds put into the account were a completed gift to the
beneficiary. A change in account owner is not a gift to the new
account owner. A beneficiary must be an individual. Therefore,
there is no way to obtain any tax deductible charitable
contribution by a change in account owner.

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removeps-groups[at]yahoo.com wrote:
- quote -

falls into that category.

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- quote -

Just to be clear, does the above cover grand-children?

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On Nov 20, 11:56 am, Tom Russ <t...[at]isi.edu> wrote:

- quote -

So if the new beneficiary is not any of those listed in the lists,
what is the gift tax consequence?

And what if you want to donate your 529 plan to a public charity (not
to a specific individual)?

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dpb wrote:
- quote -

link is also to CESAs not QTPs. The correct link for a QTP is
at: http://www.irs.gov/publications/p970/ch08.html#d0e10556

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Tom Russ wrote:
- quote -

Pub 970 has the simplified explanation.

- quote -

http://www.irs.gov/publications/p970/ch07.html#d0e8129

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Alan wrote:
- quote -

that I believe support what is above from the Code. I have not
had a chance to review the advance notice of rule changes (new
proposed regs to eliminate potential abuse) that were published
in January 2008.
http://www.regulations.gov/fdmspubli...ontentType=pdf

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Tom Russ wrote:
- quote -


There are no gift tax consequences if the new beneficiary is in
the same generation or a generation above the old beneficiary and
is a member of the same family as the old beneficiary.

I conclude, that there would be gift tax consequences if the new
beneficiary is not in the same family or if the beneficiary is in
a lower generation.

Here's the definition of family:

(2) Member of family
The term ''member of the family'' means, with respect to
any designated beneficiary -
(A) the spouse of such beneficiary;
(B) an individual who bears a relationship to such
beneficiary which is described in subparagraphs (A)
through (G) of section 152(d)(2);
(C) the spouse of any individual described in
subparagraph (B); and
(D) any first cousin of such beneficiary.

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Are there any gift tax consequences when changing the beneficiary of a
529 college savings account?

Contributions to a 529 plan are clearly covered by the gift tax
rules. But what about changing the beneficiary of the plan? Are
there any gift tax considerations there?

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