Transferring Traditional IRA Assets to a College Savings Pl
Are there any provisions with a 529 Plan or Coverdell ESA that would allow for tranfers of a Beneciary IRA money to it without paying the taxes?
Are there any provisions with a 529 Plan or Coverdell ESA that would allow for tranfers of a Beneciary IRA money to it without paying the taxes?
Permalink Submitted by Alan Spross on Fri, 2010-03-19 17:51
No such provision exists. The IRA would have to be distributed in a taxable event and the proceeds used to fund a new 529 or ESA contribution. The ESA was renamed from the original “education IRA” because it was never an IRA to begin with and the name was misleading.
UGMA or UTMA funds can be transferred into these education accounts, but they must be registered so that the beneficiary’s interests are protected as they would have been under the custodial accounts.