I want to invest $10,000. for my greatgrandson in a fund that would appreciate for him without tax consequences until withdrawal at 21 yrs. of age. What investment do you suggest?
Country/State/Province of question: USA PA
talked to Vanguard Family of Funds. Nothing completed.
While we are prohibited by law from giving you investment advice of naming specific investments, what you want is to ask your investment advisor about a 529 Plan.
A 529 plan is a tax-free investment (as long as the funds are used for educational purposes). There are no taxes year-byear NOR is there tax at withdrawal.
He can start to use the money as soon as he goes to college. If he does not use all the money, he can designate another beneficiary (such as a sibling or even an eventual child of his).
Rather than just rating my answer as "bad", it would help me to help you by understanding what information you are seeking. If it is just "which fund should I invest in", then we are indeed unable to help because that type of advice is regulated and specific advice to individuals cannot be provided in a public forum.
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what other type of funds are availity, edu7cational funds are not to be co9nsidered..I have been aware of the educational funds, need other means for investment of longterm with tax consequences paid upon his maturity
,what other type of funds are availity, edu7cational funds are not to be co9nsidered..I have been aware of the educational funds, need other means for investment of longterm with tax consequences paid upon his maturity
I am aware of the educational investments...other than this is there another recourse
If you want tax-free investments and you don't want him to touch it until he is 21, you will need to set up an UGMA type account (Uniform Gifts to Minors Act). He will not be able to control the investment until he is 21.
If you want other restrictions other than Age 21, you will need to set up a trust account, as there is no other way to control funds given as a gift.
Tax free investments include Municipal Bonds, but not necessarily municipal bond FUNDS, which is not the same investment.
Stocks would only have a tax effect only upon sale unless dividends are paid out before then, which are taxable in the year paid. US Bonds have annual interest payments which are taxable. Same with corporate bonds. REITs are also off-limits since they generate annual taxable income.
You could invest in foreign currency which also pays no interest or dividends and is not taxed until sold. But that is a very risky investment for that period of time.
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tkis for your info, i will need to rethink my tax options and direct taxes payable from income to anoher family member or research the municipal bonds as suggested