<p>I know that 529s count as a parental asset on our FAFSA filing. My question is this--my wife is the custodian for each 529 account that we set up for our sons. Do we count the only count the money in the son's account that is heading to college in 2013, or do we have to count the assets in all four accounts? </p>
<p>Doesn't seem fair that we get hit for 6% of the four account total, when we set them up as separate accounts for each son.</p>
<p>Who is the owner of those 529 accounts?</p>
<p>If they’re in your names, you have report all those accounts.</p>
<p>If they’re in your sons’ names, you only report the son’s account (as a parental asset) when he/you are doing his FAFSA</p>
<p>Next dumb question–since the value of the 529 accounts get lumped into Parental Investments, how does FAFSA know what the value of the 529 accounts are vs. other investments?</p>
<p>FAFSA doesn’t know or need to know. All reportable assets are treated exactly the same in the EFC formula.</p>
<p>The reason you need to report all parent-owned 529s on FAFSA is because the beneficiary on the accounts can be changed, and so all this money can theoretically be used to fund the first child’s college.</p>
<p>If you’re sure that the 529s of each son will be used only by that son and won’t need to be redistributed to other beneficiaries, you can change ownership to each son. The parent-owned 529 will become titled as a child-owned 529, also known as a UTMA/529. Child-owned 529s are not reported on sibling FAFSAs. The downside of a child-owned 529 is that the beneficiary can’t be changed, so you need to be careful not to over-fund each account with more money than the child is likely to use.</p>
<p>The Federal gift tax exclusion is $14,000 in 2013, or $28,000 if gifts come from both parents. The Generation-Skipping Transfer Tax (GSTT) regulations include one unique provision, applicable only to 529 plans. You may contribute up to five years worth of annual exclusion gifts in one year.</p>
<p>So, help me out here . . . there seems to be some conflicting information.</p>
<p>So long as the 529 accounts set up for Jimmy, Josie, Johnny, and Jo Jo are NOT specifically designated as UTMA 529’s, they all have to be declared as parent assets . . . is that correct?</p>
<p>Yes, all parent-owned 529s are reported on FAFSA, regardless of beneficiary.</p>
<p>Uh-oh. Following up here - if we do have accounts titled as UTMA 529s - then are they parent assets on FAFSA or child assets on FAFSA? And we do NOT count the sibling’s UTMA 529 balances as part of our investments at all? Then how do we account for them on child #1’s FAFSA filing? We don’t show those balances anywhere?</p>
<p>How do we fix this if we filed already? I know we can update income/tax data after filing our return but I don’t think we can update asset information.</p>
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They are reported as parent assets (all 529s are reported as parent assets).</p>
<p>
Correct.</p>
<p>
Correct, sibling UTMA/529s, as well as sibling UTMAs or other assets, are not reported on FAFSA.</p>
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I don’t think you can either. Try calling the FAFSA hotline number to see if the numbers can be corrected.</p>