Grandparent owned 529

BelknapPoint
Thu, 23 May 2019 19:42:18 +0000

BelknapPoint is good at answering these questions. But I think I have this right.

Any money paid by grandma in 2019 (this year) would not be reported until you file the 2021-2022 financial aid forms. And by that time, this student will be a graduate…right? So no Advantage to switching.

Yes, that’s right regarding reporting the money used from the grandparent owned 529 as student untaxed income. And, if there are any more financial aid forms to file for the student in question for any academic year, if the 529 were transferred to parent ownership the parent would be required to report any funds in the 529 as a parent asset. So there is potentially a good reason not to transfer ownership from the grandparent to a parent.