Joe, I think what Mark wants to do, now that he has taken a lump-sum distribution from his Coverdell and invested the funds in a parent-owned 529, is to rollover the 529 to a different 529 every 12 months in order to take advantage of the New York income tax deduction for 529 contributions, without making a contribution with "new" dollars. Mark, please let me know if I have it wrong.
Joe, you say in your post above that "you don't have to worry about the 12 month rule associated with 529-to-529 rollovers." I assume that this statement applies only to the Coverdell to 529 "conversion" that Mark did, because unless Mark changes the beneficiary, he is limited to rolling a 529 to a different 529 to just once in any 12-month period, correct?
In order to take the New York income tax deduction for a 529 contribution, the contribution must be made to a New York 529 plan. So for Mark's strategy to work over several years using the same funds, he will have to stay within whatever choices New York offers for 529 plans, correct?
Finally, and this is where I see the problem, can rolling funds from a parent-owned New York 529 plan to a different parent-owned 529 plan, without contributing any new dollars, really qualify for the New York income tax deduction for 529 contributions? If so, that would seem to go against the legislative intent in creating the deduction, which is to encourage regular contributions of new money to 529 plans in order to help fund a future college education.