529 Questions
- Thread starter briko3
- Start date
- 10,722
Im not sure....Would the beneficiaries be in the same family? I think its LIFO..
But I am no expert on 529s at all .... hopefully someone else will know definitively....
intersting scenario though
- Thread starter
- #3
To give a little more info, they have an older son that got some scholarships (which means that they would not be assessed the 10% penalty on growth) but also that he is overfunded in his 529 by about $40,000. His younger brother has a 529 that is funded enough for his age. So in order to get to the older brother's money "tax free" we're wondering if we can pull the principal (which would be tax free) and then transfer the growth to the younger brother (which should transfer tax free since he is part of the same immediate family). Then the younger brother's 529 would be overfunded and the question is can we then pull principal out of the younger brother's 529 tax free?
The ultimate question is if you can pull out just the principal (without the growth) or transfer the growth without the principal. Complicated, I know but could result in an annuity sale for the excess principal.
The ultimate question is if you can pull out just the principal (without the growth) or transfer the growth without the principal. Complicated, I know but could result in an annuity sale for the excess principal.
- 15,041
Have you considered calling the plan sponsor?
- 10,722
I agree. Call the sponsor of each individual plan and tell them what you want to do.
You are dealing with sec.529 fed tax codes and regs, state specific tax codes and regs for 529s, then the actual plan itself and the specific features that it has.
good luck
