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can the owner(Parent) of a 529 plan change the ownership to ...

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can the owner(Parent) of a...
can the owner(Parent) of a 529 plan change the ownership to a son that is in college. What are the tax consequences of such a transfer? The owner is a new hampshire resident and the son is over 18 years of age
Submitted: 9 years ago.Category: Tax
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1/11/2008
Tax Professional: Bill, Enrolled Agent replied 9 years ago
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
Experience: EA, CEBS - 35 years experience providing financial advice
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Yes, the owner can be changed to a son. If the son is also the beneficiary on the plan then there are no tax consequences. However, if the son is not the current beneficiary on the plan then there other issues and factors involved.

http://advisor.morningstar.com/articles/doc.asp?docId=3311

Sample change form - http://www.collegesavings.pacificlife.com/public/mutual_funds/forms/529/mt_ntl/3091-07a_mt.pdf

http://books.google.com/books?id=ZPPb7_SjHFEC&pg=PA156&lpg=PA156&dq=changing+the+owner+on+a+529&source=web&ots=Ojl0oHiF-M&sig=f_bEzjVq3Z7E44bXYkiXkdAsBHE#PPA156,M1

 

 

Bill
Bill, Enrolled Agent
Category: Tax
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Customer reply replied 9 years ago
The responce is great, thanks.
Have another question to the plan going forward.
this plan is in excess of 100k and it seems that the father has gotten a substantial asset out of his control without any tax implications.
isn't this abusive?
Tax Professional: Bill, Enrolled Agent replied 9 years ago
No, it would not be considered abusive since 4 years of college expenses at a private college usually cost more than this. Assuming all of the gifting reporting rules were followed (meaning gift tax returns were filed if any excess gifts were made) when the previous gifts were made to fund the program, then there should be no problems. If the son doesn't use the funds for college then withdrawals of any earnings in the account will be subject to income taxes and a 10% penalty.
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