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#16275 - 05/01/02 02:13 PM fifo or lifo
aaronwlehman Offline
Member

Registered: 04/12/02
Posts: 14
Loc: Indiana, PA USA
Are withdrawls from 529 plans lifo or fifo?
_________________________
aaronwlehman@yahoo.com

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#16276 - 05/01/02 02:24 PM Re: fifo or lifo
tjb_nc Offline
Member

Registered: 04/12/01
Posts: 2486
Loc: NC
Neither. Withdrawals are done on a pro rata basis.

TJ

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#16277 - 05/02/02 01:40 PM Re: fifo or lifo
aaronwlehman Offline
Member

Registered: 04/12/02
Posts: 14
Loc: Indiana, PA USA
If a client takes a withdrawl from their 529 plan, would the interest or the principal get hit first to pay for state taxes.
_________________________
aaronwlehman@yahoo.com

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#16278 - 05/02/02 02:17 PM Re: fifo or lifo
tjb_nc Offline
Member

Registered: 04/12/01
Posts: 2486
Loc: NC
Each withdrawal is done on a pro rata basis, including both an earnings component and a contributions component.

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#16279 - 05/02/02 07:03 PM Re: fifo or lifo
bwilk Offline
Member

Registered: 05/14/01
Posts: 3345
Loc: AZ
The principal never gets hit for taxes. If your basis is 50k and your gains are 25k and you make a 15k qualified w/d, then it is considered 10k of basis and 5k of gain.

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