Have considered Florida prepaid for several years and have finally opened accounts for 2 children.
The way it works is you set up an account first and then fund it later. I guess most families fund with periodic payments. I've set ours up with a lump sum contribution (~29 k each) and the lumps are due April 2018.
My plan was to roll over existing 529s (with capital gains) but I've encountered a problem not easily found on searching the internet. The problem is having multiple 529 accounts with 2 beneficiaries (instead of 2 and 2) - per IRS, you can only roll over 1 plan in 12 month period/beneficiary.
For example, Child A has 2 529 accounts (different states):
1 account current value of 18 k (with 4 k gains)
1 account current value of 11 k (with 6 k gains)
So if I try to roll both of these 529 into child A's new prepaid plan, the 4k gains (plus 10% penalty) would be added to my income for tax purposes.
FYI, Child B has 1 529 account - it is valued at 18 k (with 4 k gains)
I really wanted to roll things over so to keep 529 basis low if I had a choice. Was going to contribute to future 529 plans.
None of these states had state tax deductions, so no worries about that issue.
1. Roll over 18 for child B and either 18 or 11 to Child A and pay for remaining out of pocket.
2. Indirect rollover of Child B's 529 and Child A's 11k 529 to one of the new prepaid account (funding fully) and cancel the other child's prepaid account with plan to open it next year and contribute.
Other ideas? Thanks!
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