Son decides not to go to college - Daughter is going to college - can they transfer money from son's 529 to pay for daughters tuition?
Getting mixed reviews.
Getting mixed reviews.
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Yes.Originally posted by JT2307 View Post
From IRS instructions:
Can I change the beneficiary of a 529 plan I have set up?
A. Yes. There are no tax consequences if you change the designated beneficiary to another member of the family. Also, any funds distributed from a 529 plan are not taxable if rolled over to another plan for the benefit of the same beneficiary or for the benefit of a member of the beneficiary’s family. So, for example, you can roll funds from the 529 for one of your children into a sibling’s plan without penalty.Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR -
Who are you asking? Just do a simple Google search, and the results will be consistent.Originally posted by JT2307Roland Slugg
"I do what I can."Comment
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Here is the problem - she withdrew the money from sons and was just going to pay daughters tuition. she did not roll it over or change beneficiary.
The broker told her the 1099 will be in the sons social.
Thoughts....Comment
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If it is within 60 days she can do rollover. If beyond that it is taxable income in my opinion.Originally posted by JT2307 View PostTaxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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Not sure a rollover is in play
I'm not quite sure you can do a "rollover" of funds already withdrawn.Originally posted by ATSMAN View Post
Certainly the mother could have assigned the account (changed the beneficiary) from son -->> daughter, and then taken a distribution, but that really is not the case here.
The real answer lies within the 529 plan manager, and what options they have/had. A "correction" is more probable than a "rollover."
In any case, any taxable income (you still have to "prove" allowable college expenses were paid with the withdrawn funds) would fall upon the beneficiary, and not the owner.
Stated differently, the son could well be looking at a tax liability for unqualified distributions from "his" 529 plan.
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