delayed 529 disbursement for qualified expense

Paying for College
1

<p>I gambled and lost! I have my college freshman’s 529 money in an S&P 500 index fund. Obviously, I have a lot less money than I did 6 months ago. Nonetheless, I am optimistic that a large part of the loss could be regained in the next 6-12 months as the market anticipates the end of the recession.</p>

<p>My question is: Can I wait 6- 12 months and then disburse money for expenses I have already paid over the past year?</p>

<p>Thanks for any input.</p>

2

<p>My understanding (not a tax accountant) - As long as the disbursement is in the same calendar year as the qualified expenses you are fine. So taking the money out Sept 2009 for a January 2009 expense is OK. Taking it out for a 2008 expense is not.</p>

<p>The relevant IRS publication is IRS970.
<a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf&lt;/a&gt;
page 49 (qualified tuition programs)</p>

3

<p>Thanks, swimcatsmom. That’s very helpful. th</p>

4

<p>The disbursement has to be in the same year as the expenses. My acct is underwater too. I’m paying this year’s tuition with my income and loans and hoping the accounts recover.</p>