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[quote=Anonymous]Not the OP, but I am a CPA.

The truth is that Virginia is stupid and left a loophole in the tax law because it worded the language of the 529 deduction poorly.

It is a gray area and I would consult your tax advisor.

But the actual statute allows for a $4,000 per college savings "account," but then doesn't define what "account" means.

There is basically no guidance on it from the VA Dept of Revenue.

In the inVest 529 plan, you create an overall online account under each individual owner. Then for each fund you buy, they create a separate account and give each fund an account number.

So is an "account" the overall account for the individual, or each account for each fund purchased.

People have been deducting more than $4,000 per person if they have own more than one account. I don't know a single person that has gotten a notice or letter from the VA Dept. of Revenue for doing this.

But the VA Dept. of Revenue have provided various reports where they make passing references to the $4,000 deduction and say it is $4,000 per person.

My suspicion is that they know they screwed up with the statute, left a loophole, but very few people are deducting more than $4,000 per person, so they aren't doing anything about it.

They could issue a regulatory interpretation or rule, but it could be challenged in litigation because the statute would supersede those interpretations.

There is no litigation where VA disallowed those deductions and then a person challenged it in court.

So no one really knows. My guess is people will probably get away with it if it is not a huge amount doing it, but if it makes an impact or gets a lot of publicity as a loophole then the VA Dept of Revenue or the legislature may move to correct it.

Logically it makes no sense that the inVest could be tens thousands of dollars by spreading it to different funds while the Prepaid program would be limited to $4,000.

I wouldn't do it, but if you like playing the audit lottery and are aggressive, you can roll the dice. 
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