529 Plans and grandparents

<p>If you contributed $50K in 2009 to one 529 account (is that right?) it’s as if you contributed $10K/year for 5 years. Your combined exclusion is $26K/year, so together you and your spouse can contribute a total of $16K/year for years 2-5. This will total $114K, which of course is less than the $130K you might have otherwise contributed.</p>

<p>However, if you’re not concerned about maxing out your 1mm lifetime limit, you can contribute more than this every year without incurring taxes, but you’ll have to track it and report it.</p>

<p>Are you qualified to contribute to a Coverdell? The contribution limits are pretty low, unfortunately.</p>

<p>yes you have it right…thanks for the clarification and patience.</p>

<p>One other little loophole to get the grandparents 529 off of the profile. Money in a 529 can be shifted by the account holder (the grandparents in this case) from one beneficiary to another. So if the 529 is for one grandkid - the other grandkid doesn’t have to declare on the profile. The money gets shifted around as needed.</p>