Move $ from brokerage to 529?

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Move $ from brokerage to 529?

Post by airahcaz »

A grandparent has college money invested in an SP500 index fund for his grandchild. Does it make sense to sell now, pay long term capital gains taxes at 15%, and invest the proceeds in an identical fund in a 529?
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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Re: Move $ from brokerage to 529?

Post by mhalley »

The purpose of a 529 is to avoid paying taxes on the money. Depending on how many years until the money is to be used, it could make sense. If the child is 2, fine, 15, maybe not. Will the taxes be paid from the proceeds of the sale?
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Re: Move $ from brokerage to 529?

Post by Gloucester Road »

Can the grandparent claim a state tax deduction for the 529 contribution?
Are the 529 plan fees/fund expense ratio reasonable?

The answers to those questions might tip the scale.
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Re: Move $ from brokerage to 529?

Post by Thecallofduty »

Well, I think it depends. Probably need some numbers from OP to say.

10000 investment grew to 11k. 15% tax is 150 dollars

Put the money for 17 years in 529 is probably a good idea.

Really depends on the investment amount and capital gains amount. Obviously if orginal nvestmemt was 10k and grew to 25k, then tax is 2250 and likely not worth selling Now at least

Ill let smarter people chime in.
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