529 Plan: Transfer from DC to UT after 2 year recapture
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Anonymous
| I live in DC. Can I contribute to the DC 529, get the tax deduction, and then wait until the two year recapture period expires before transfering funds each year to the UT plan for lower fees and greater investment choices. After the first two years, it would just be an annual task. I checked and there don't seem to be any transfer fees (Calvert - DC) to the UT Plan and I also asked the DC College Savings plan which responded without objection, but am I missing anything? I just want to be compliant with the rules. |
Anonymous
This is what we've done. We put $50,000 into plans last year, and are just sitting on it for 2 years before rolling to UT. Technically the tax-benefits are good for 5 years (I'd have to check, this is from memory), even though the recapture is only 2. Thus, I can take the deductions even after I've moved the funds out as a rollover from the prior years. |
Anonymous
| NP here. I live in MD. This idea sounds great. Can I do it, too, or does this only work for DC residents? Could someone post a link with information in this? Thanks! |
Anonymous
| If you want to make future contributions to DC Fund in order to get tax benefits in future years, would you have to close the account you are transferring and open a new one? |
Anonymous
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I was under the impression that the fund could stay open and the deductions would be acceptable if new money is going into the fund every year. See below:
2013-fund 8K 2014-fund 8K, deductions for 2013 2015-fund 8k, deductions for 2014 2016-fund 8k, deductions for 2015, transfer 2013 to UT 2017-fund 8k, deductions for 2016, transfer 2014 to UT 2018-fund 8k, deductions for 2017, transfer 2015 to UT I don't know how to calculate what gains can be trasferred in 2016 and beyond. |