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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]How is putting money in a college fund have anything to do with a gift tax?  Never worried about it and put $10-30K per year in.[/quote]

Gift tax applies to transfers of funds to any person, including your children. In fact, particularly your children. It's intended to prevent people from circumventing estate taxes by giving their kids $$ before they die.  There is one special exemption that allows you to put $70,000 in a 509, but it has to be spread over 5 years, so I'm not sure that it really changes much. If you give someone an amount over the gift tax limit and don't pay the gift tax or file to apply against your exclusion, you are violating the law.  You probably won't get caught unless you get an IRS audit. [/quote]

The money in a 529 is still considered to be the parent's. [/quote]

This. The money in my kids VA 529 is in my name, right of survivorship, DH. It is on behalf of my kids. But, I could transfer it to another family member if I chose (which I would not).  Nothing in a 529 vests in the kids and they have no control over the money.  So it is not a gift.[/quote]

Not true according to my tax accountant.  We put about $50k in each kid’s account last year and had to file paperwork with the IRS to apply to their exclusion.[/quote]

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