529 vs gifting shares

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airahcaz
Posts: 1523
Joined: Sat Oct 31, 2009 3:37 pm

529 vs gifting shares

Post by airahcaz »

Other than state tax deduction where applicable, what's the advantage of a 529 plan over just transferring appreciated shares (both invested in a similar index fund) to your child in college? If you gift, and that 18 year old is at an income level with 0% long term capital gains, the child can sell them and pay for education that way (up to $30K per couple/year?).

What’s missing?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
ModifiedDuration
Posts: 254
Joined: Sat Dec 05, 2015 4:33 pm

Re: 529 vs gifting shares

Post by ModifiedDuration »

Kiddie Tax
Topic Author
airahcaz
Posts: 1523
Joined: Sat Oct 31, 2009 3:37 pm

Re: 529 vs gifting shares

Post by airahcaz »

ModifiedDuration wrote: Sat May 16, 2020 7:44 am Kiddie Tax
“ The kiddie tax is a tax imposed on individuals under 17 years old whose investment and unearned income is higher than an annually determined threshold.”

Wait till 18
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
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anon_investor
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Re: 529 vs gifting shares

Post by anon_investor »

airahcaz wrote: Sat May 16, 2020 7:54 am
ModifiedDuration wrote: Sat May 16, 2020 7:44 am Kiddie Tax
“ The kiddie tax is a tax imposed on individuals under 17 years old whose investment and unearned income is higher than an annually determined threshold.”

Wait till 18
I think you have to wait until 24:

https://www.bogleheads.org/wiki/Kiddie_tax
ModifiedDuration
Posts: 254
Joined: Sat Dec 05, 2015 4:33 pm

Re: 529 vs gifting shares

Post by ModifiedDuration »

Yes, the Kiddie Tax applies until age 24 for full-time students.
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