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CGCPA
CGCPA, CPA
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Ive saved money for my daughters college education in a 529

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I've saved money for my daughter's college education in a 529 account. She is currently a junior in college and she's looking to travel to Africa this summer for a volunteer service project with an NGO for which she'll also get independent study credit from her college towards her degree. I'm wondering if I can use funds from the 529 account to offset some of the expenses associated with her trip and time in Africa (i.e., flights, food, lodging) given that she'll be getting credit and the credit will come from her home (accredited) university (unlike a travel abroad). Appreciate any advice that can be provided on this topic.
Submitted: 3 years ago.
Category: Tax
Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

You are legally permitted to this, based upon the information you have provided but should be aware that the amount expended will be taxed to her. If both you and your daughter can live with this (knowing that you may end up subsidizing her tax cost) it may be a great idea. I would caution you to be aware of where she is going. Africa is a large place and not all the populace there is friendly to Americans. Volunteer projects are wonderful learning and growing experiences for her and can help the local people but, if the area is dangerous, is it prudent for her to be at risk?

Customer: replied 3 years ago.

Charles,

 

Thanks for the information and advice. One question of clarification. From your response I'm gathering that it is legally okay for me to use 529 funds for this given that it relates to her ability to get academci credit for the trip/progam given that she's a full-time student, but that the amount that I'd contribute towards the trip/program from the 529 account is taxable income for her? Am I understanding this correctly?

 

Thanks.

Expert:  CGCPA replied 3 years ago.
Yes, you understand correctly.
CGCPA, CPA
Category: Tax
Satisfied Customers: 3740
Experience: over 40 years experience in tax matters
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