Yes, he is my dependent and will be starting college in the Fall. The funds for college will come from various savings and assets and I'm just trying to figure out the most tax efficient way of raising the cash.Then you do have a decent plan. Since this is a potential 2008 item rather than a 2007 bit of historical scorekeeping, the taxes get a bit better. For 2008, your son will get a standard deduction of $900, and another $900 taxed at his rate. And for 2008, his rate on long-term capital gains will be zero. The balance of any income will be taxed at your rates.So if he has no other income at all, he'll get $1800 of long-term capital gains at zero tax, and the balance of any gain (apparently about $200) will get taxed at your rate. We'll assume that's 15%. So you'd get $2000 of capital gains for a total federal tax of $30. Not a bad result at all.You will need to look into your state tax situation as well. It will undoubtedly be different.--Peter
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