Personal Investments • 529 Plan Contributions and Gift Taxes

Can the 529(c)(2)(B) election be made two years in a row? As an example, consider the following hypothetical contribtuions to a 529 plan:

$51,000 in 2023
$36,000 in 2024

Let's say the 2023 contribution was treated as having been made ratably over a five year period starting in 2023.  In addition, can the 2024 contribution be treated as having been made ratably over a five year period starting in 2024?  If this is allowed, the total amounts of non-taxable gifts will be: 

2023: $51,000/5  = $10,200 (Limit is $17,000)
2024:$51,000/5 + $36,000/5 = $17,400 (Limit is $18,000)
2025:$51,000/5 + $36,000/5 = $17,400 (Assume limit remains $18,000)
2026:$51,000/5 + $36,000/5 = $17,400 (Assume limit remains $18,000)
2027:$51,000/5 + $36,000/5 = $17,400 (Assume limit remains $18,000)
2028: $36,000/5 = $7,200 (Assume limit remains $18,000)

Form 709, Schedule A, line B instructions don't say whether the 529(c)(2)(B) election can be made two years in a row!

Statistics: Posted by Iamlearning — Tue May 21, 2024 12:03 pm — Replies 4 — Views 238

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