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Reply to "Investment Account as College Fund"
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[quote=Anonymous]If you use a 529 account and use the money for college, then you won't be taxed on the gains in the account (and you might get a state tax break). On the other hand, if you use a 529 account and don't use the money for college (and you don't fall in an exception, like a scholarship), you will owe tax on your earnings at ordinary income rates (not capital gains) and you will also owe a 10% penalty on your earnings. Obviously it's up to you which way to go, but I wouldn't put more in a 529 than you expect to use. There may be other ways you can save that will reduce taxes, such as a Roth IRA, or buying mutual funds/ETFs, will at least make you eligible for capital gains treatment. [/quote]
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