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Subject Author Date
Mutual Fund to 529 ... M100C 02-18-2007
Posted by M100C on February 18, 2007, 3:50 am
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 When my daughter was born in 1995, we setup an investment
account and made a one-time investment of $10,000 across
several mutual funds. The goal was to save for her
education. Today, there is about $20,000 in the account.

I have also setup a 529 account in my state
(www.misaves.com). Here is my question:

Given that:
1) the 529 is funded with post-tax dollars, and
2) these dollars grow tax-deferred, and
3) distributions used to pay for qualified higher education
expenses are tax-free, then:

is there some way to move the balance from my investment
account w/o paying taxes on the gains (since these gains
would have been tax- deferred in a 529)? You'd think so,
since non-qualified distributions get taxed AND penalized.

Your input and advice is appreciated,

Chris

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Posted by Rich Carreiro on February 18, 2007, 9:32 pm
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> is there some way to move the balance from my investment
> account [to a 529] w/o paying taxes on the gains

Nope.

> would have been tax- deferred in a 529)? You'd think so,
> since non-qualified distributions get taxed AND penalized.

Actually, only the earnings portion of non-qual 529
distributions get taxed and penalized.

--
Rich Carreiro rlcarr@animato.arlington.ma.us

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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