Change of beneficiary, is it considered a gift

s01041093 2021-07-08 19:38:04 UTC #1

Hi,

If one was to change the beneficiary on a 529 from a daughter to a niece, will that be considered a gift and if so from whom?

dcandmc 2021-07-09 13:00:17 UTC #2

A roundabout way of answering your question:
If the beneficiary is being changed from the account owner's daughter to a first cousin of the daughter, there will be no federal income tax consequences.

mariaku 2021-07-28 05:57:03 UTC #3

The question was not about the federal "income tax" consequences, but about the federal "gift tax" consequences.

dcandmc 2021-07-31 20:47:34 UTC #4

First of all, it's not exactly clear what the question is specifically about. Second, any tax consequences arising from a gift that exceeds the annual exclusion amount (usually for reporting only on IRS Form 709) and that also exceeds the lifetime estate and gift exemption (when an actual tax is owed) while technically not an income tax, the distinction is usually not important because so few gift givers will ever pay a gift tax. Anyway, it's been 23 days now and OP has not reappeared with a follow-up question, comment or clarification.

mariaku 2021-07-31 21:18:10 UTC #5

OP saying "will that be considered a gift and if so from whom?" tells me pretty much the question is about "gift tax" consequences, as there are no "income tax" consequences to gifts.

Are you serious in even considering talking about exceeding lifetime gift-tax exemption (currently $11.7M per individual, $23.4M per couple)? If this is one's concern, they wouldn't be found on this forum.

dcandmc 2021-08-01 14:24:35 UTC #6

Maybe you missed this:

"...lifetime estate and gift exemption (when an actual tax is owed) while technically not an income tax, the distinction is usually not important because so few gift givers will ever pay a gift tax."