529 Plan owners can leave the plan to others at death . Unlike IRAs and HSAs , 529 plans can exist in perpetuity . Also , unlike IRAs , there are no required minimum distributions .
Plan without any gift tax consequence . For 2023 , the annual gift exclusion is $ 17,000 . Therefore , the Super 529 contribution would be $ 85,000 .
Although there is no taxable gift , Form 709 ( Gift Tax Return ) still needs to be filed and this contribution to the 529 Plan must be
$ 85,000 to her new grandchild ’ s 529 Plan in 2023 , but passes away three years later . This leaves two years ’ worth of the Super 529 contribution —$ 34,000 — that will need to be added back to her taxable estate .
At age 16 , the funds would have been in the 529 Plan for at least 15 years . If the child lifetime transfer limit is reached . Who knows if Congress will increase this amount in the future .
Questions about the 529 Rollover to Roth IRA There are many unanswered questions about
529 Plan owners can leave the plan to others at death . Unlike IRAs and HSAs , 529 plans can exist in perpetuity . Also , unlike IRAs , there are no required minimum distributions .
reported on the top of Page 2 of Form 709 . The donor needs to outlive the gift by five years for a completed gift . If the donor passes away during the five-year period , then the portion of the incomplete gift will be added back to the donor ’ s estate .
For example , grandma contributed is working , then the child can start moving the money from the 529 to the Roth . For example , my son earned $ 843 when he was 16 . We opened and contributed $ 843 to his Roth IRA . In this case , $ 843 can be rolled over to the Roth IRA .
You keep doing this until the $ 35,000 this new provision , including when we can expect guidance from the IRS ?
One common question is what happens if the 529 beneficiary is changed ? Does the 15- year requirement start over ? Does the 15-year holding period carry-over from the previous beneficiary ?
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