Joint Tax Committee seeking to eliminate 529 estate tax benefit
The Joint Committee on Taxation has released "Options to Improve Tax Compliance and Reform Tax Expenditures," a 400+ collection of suggested tax-loophole closers. Among the proposals is one that would remove the ability of a 529 account owner to keep the asset out of his or her gross estate while retaining full control over the account. Contributions to a 529 plan would be completed gifts only if certain requirements were met that prevented reversion of the account to the account owner. Otherwise, the gift occurs only upon distribution for the benefit of the beneficiary. In addition, contributions to a 529 account by a third party would be considered a gift to the account owner under certain conditions. Click on the link provided and refer to page 412.
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