Paying for college

Ijmom
Sun, 20 Jul 2008 13:34:09 +0000

<someone in=“” another=“” forum=“” was=“” repeatedly=“” stating=“” that=“” 529=“” proceeds=“” must=“” be=“” deposited=“” directly=“” into=“” the=“” school=“” account=“” of=“” student=“” to=“” avoid=“” taxes=“” —=“” their=“” adviser=“” had=“” told=“” them=“” so.=“”></someone>

Why do we have to transfer directly to college account to avoid taxes?
The money invested in 529 is after tax money… therefore, we don’ owe any tax (on interest earned) on it as long as we use it for college.