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My wife received a partial disbursement from her 401k because of being in a higher income level in her company, and we were wondering what to do with the money she received. We are considering two options to avoid paying taxes on it: roll it over into an IRA or put it in some sort of college fund for our son (who is to be born in April).

1. Is there an income level that if reached prevents us from rolling it over into an IRA without paying taxes?
2. Are there college funds available that can be started for my son even though he's not been born yet? Is this even a tax free option?

Thanks in advance,
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