Can 529 lump sum split over several months?

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nckhrs
Posts: 4
Joined: Wed May 16, 2018 1:59 am

Can 529 lump sum split over several months?

Post by nckhrs » Wed May 16, 2018 2:02 am

Hi,

I would like to ask a question regarding 529.

I plan to do 5-year election of lump sum contribution to my 529 account that I just opened.
Does the $75,000 amount have to be transferred at one time? Or can it be split into multiple transfer over the course of a several months, as long as they all happen within the same year (this year)?

Thank you so much! :D

Silk McCue
Posts: 849
Joined: Thu Feb 25, 2016 7:11 pm

Re: Can 529 lump sum split over several months?

Post by Silk McCue » Wed May 16, 2018 9:03 am

Joe Hurley runs the site savingforcollege.com and says yes you can.

"It can be done in multiple installments anytime during the year." - Joe Hurley

https://forum.savingforcollege.com/t/52 ... tion/11383

Cheers

Spirit Rider
Posts: 7820
Joined: Fri Mar 02, 2007 2:39 pm

Re: Can 529 lump sum split over several months?

Post by Spirit Rider » Wed May 16, 2018 10:11 am

IRS Form 709 is based on your total gifts for the tax year. It does not matter how many of what size the contributions.

nckhrs
Posts: 4
Joined: Wed May 16, 2018 1:59 am

Re: Can 529 lump sum split over several months?

Post by nckhrs » Wed May 16, 2018 11:06 am

Silk McCue wrote:
Wed May 16, 2018 9:03 am
Joe Hurley runs the site savingforcollege.com and says yes you can.

"It can be done in multiple installments anytime during the year." - Joe Hurley

https://forum.savingforcollege.com/t/52 ... tion/11383

Cheers
Thanks Silk! :D

nckhrs
Posts: 4
Joined: Wed May 16, 2018 1:59 am

Re: Can 529 lump sum split over several months?

Post by nckhrs » Wed May 16, 2018 11:07 am

Spirit Rider wrote:
Wed May 16, 2018 10:11 am
IRS Form 709 is based on your total gifts for the tax year. It does not matter how many of what size the contributions.
Thanks a lot Spirit Rider! :D

Btw, I was wondering why IRS didn't put this in any of their publications or instructions.
Do you happen to know where they mention this?

Spirit Rider
Posts: 7820
Joined: Fri Mar 02, 2007 2:39 pm

Re: Can 529 lump sum split over several months?

Post by Spirit Rider » Wed May 16, 2018 11:24 am

I hope this doesn't sound snarky, but there is really no reason to say much of anything. It is an Annual Exclusion. Here are some allusions in the Form 709 Instructions.

From the 2017 Form 709 Instructions, Annual Exclusion, page 3.

All of the gifts made during the calendar year to a donee are fully excluded under the annual exclusion if they are all gifts of present interest and they total $14,000 or less.

From the 2017 Form 709 Instructions, Line B. Qualified Tuition Programs (529 Plans or Programs), page 6.

If in 2017, you contributed more than $14,000 to a Qualified Tuition Plan (QTP) on behalf of any one person, you may elect to treat up to $70,000 of the contribution for that person as if you had made it ratably over a 5-year period.

nckhrs
Posts: 4
Joined: Wed May 16, 2018 1:59 am

Re: Can 529 lump sum split over several months?

Post by nckhrs » Wed May 16, 2018 1:25 pm

Spirit Rider wrote:
Wed May 16, 2018 11:24 am
I hope this doesn't sound snarky, but there is really no reason to say much of anything. It is an Annual Exclusion. Here are some allusions in the Form 709 Instructions.

From the 2017 Form 709 Instructions, Annual Exclusion, page 3.

All of the gifts made during the calendar year to a donee are fully excluded under the annual exclusion if they are all gifts of present interest and they total $14,000 or less.

From the 2017 Form 709 Instructions, Line B. Qualified Tuition Programs (529 Plans or Programs), page 6.

If in 2017, you contributed more than $14,000 to a Qualified Tuition Plan (QTP) on behalf of any one person, you may elect to treat up to $70,000 of the contribution for that person as if you had made it ratably over a 5-year period.
Thanks a lot! I really appreciate it. :happy
I must have overlooked those lines.

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