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My son is thinking about moving some money for his youngest son into a 529 plan, but he lives in CA and has the impression that the CA plan is not very attractive. Anyone have any input on that plan, other plans, other sources of info?
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savingforcollege.com is a good resource.
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Thanks. I'll pass that along.
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My son is thinking about moving some money for his youngest son into a 529 plan, but he lives in CA and has the impression that the CA plan is not very attractive. Anyone have any input on that plan, other plans, other sources of info?

I live in CA.
And the CA 529 plan is good IMO.
BUT there isn't any reason for me to use the CA plan vs. any other state's plan.

In addition, my parents (my kid's grandparents) are in a state that does give an income tax deduction for 529 contrib.
And my spouse and I trust my parents.
And grandparent's assets aren't part of FAFSA.
So my best option is to give money to my parents and have them contribute to the 529 in their state for benefit of my kids.
It's like a guaranteed extra ~5% ROI for the first year, and the investment options in the grandparent's state are just as good.
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Interesting, thanks. Yes, I am in IL, where it is deductible.
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hfk1980 writes (in part):

While, your parents live in a state that gives income tax deductions for 529, they are missing out on the IRS GIFT Tax, which for 2020 is $15,000 per person it is given to. Meaning, while it cannot be deducted from their income tax, it can be deducted from their federal taxes. Per https://www.irs.gov/businesses/small-businesses-self-employe......

I reply:

You appear to misunderstand how the unified gift and estate tax works, at least at the federal level. Gifts are not deducted from your income (nor are they income to the recipient). You can give away up to the annual limit without eventually affecting your estate taxes. If you exceed your annual limit (after using techniques such as having both you and your spouse contribute the annual limit to both parents), then you start eating up the exclusion that will reduce or eliminate your estate taxes. If you give away so much money that you eat up the entire exclusion, then you'll start owing gift tax on what you give away.
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foo1bar: "In addition, my parents (my kid's grandparents) are in a state that does give an income tax deduction for 529 contrib.

And my spouse and I trust my parents.

And grandparent's assets aren't part of FAFSA.

So my best option is to give money to my parents and have them contribute to the 529 in their state for benefit of my kids.

It's like a guaranteed extra ~5% ROI for the first year, and the investment options in the grandparent's state are just as good."

Depending on how much you are giving beware of limits for annual gift tax exclusion.

When withdrawing, be aware of the rules for how grandparents' payments from 529 count in kids income on FAFSA the next year.

Regards, JAFO
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