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529/gift tax question
Old 06-09-2018, 12:21 PM   #1
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529/gift tax question

We are starting to dump money into 529s for the two kids. We get a state tax deduction so this is attractive. The gift tax exemption is 15k and I am trying to stay within it. I believe that means that dw and I can each give each kid 15k for a total of 30k per kid per year. Is this correct?
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Old 06-09-2018, 12:28 PM   #2
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We are starting to dump money into 529s for the two kids. We get a state tax deduction so this is attractive. The gift tax exemption is 15k and I am trying to stay within it. I believe that means that dw and I can each give each kid 15k for a total of 30k per kid per year. Is this correct?

No, as a couple each of you can give $15k per child, or $30k for each child. A total of $60k. Iíll be doing the same thing in July when grandtwins are born.
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Old 06-09-2018, 01:27 PM   #3
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No, as a couple each of you can give $15k per child, or $30k for each child. A total of $60k. Iíll be doing the same thing in July when grandtwins are born.
Great. I Mau not have expressed it well, but we both understand it the same way.
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Old 06-09-2018, 01:29 PM   #4
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No, as a couple each of you can give $15k per child, or $30k for each child. A total of $60k. Iíll be doing the same thing in July when grandtwins are born.
Isn't that just what he said?
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Old 06-09-2018, 01:30 PM   #5
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Isn't that just what he said?

I guess I needed to read it again.
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Old 06-09-2018, 01:44 PM   #6
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I believe you can also make a five-year election and contribute $75,000 for each child per parent ($150,000 total for each child). You won't get the state tax deduction (assuming it has an annual cap) each year like you would if you spread it out.
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Old 06-10-2018, 06:38 AM   #7
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I believe you can also make a five-year election and contribute $75,000 for each child per parent ($150,000 total for each child). You won't get the state tax deduction (assuming it has an annual cap) each year like you would if you spread it out.

Oddly, Colorado has no cap on the amount they allow you to deduct.
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Old 06-10-2018, 07:01 AM   #8
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I'm glad we didn't trigger this... We did about $6k/year/kid and have built up enough to cover a good public education for 4 years.

It's odd to me that the gift tax applies if you are the one who set up the account... Technically you own the account (vs the kid). They are the beneficiary, but the parent (or grandparent) is the owner. If you were paying for college outside of a 529 it wouldn't be a gift. But a quick google shows gift tax rules apply.
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Old 06-10-2018, 07:08 AM   #9
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It is possible that this was sloppily written legislation and they simply left the parental exception out. Who knows?
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Old 06-11-2018, 11:18 AM   #10
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Years back, we put in $100K lump sum into our DS's account. I filled out the gift tax return and (at least in my state) was able to deduct the maximum $20K per year over the next 5 years.
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