Joe
I think we should review your post. Section 529 c-5-b covers Gift taxes as they relate to Chapters 12 & 13. Which I take to mean the Bankruptcy provisions. But I guess it could mean 2512,2513 of the gift tax provision which case I guess it applies.
If you go up in 529 related to rollovers and change in beneficiary it says it must be to and immediate family member with no provision for up or down the tree.
If you then go to "immediate family member" later in 529 it defines it with a reference to 152-d-2 para A-G.
Now this is where the confusion gets to me because item A is "child" of the TAXPAYER. Now normally this section is related to dependents but the 529 section is related to beneficiary so it seems they would be substitued in this case.
In any event I would want a ruling from the IRS before I assumed anything about this issue that may invovle taxes when any change is made out side the known tree. Since the tree includes first cousins I am just not sure where it stops.
Please review and let me know. Do you have anything on point from the IRS?
[This message has been edited by sonny98 (edited September 22, 2005).]
[This message has been edited by sonny98 (edited September 22, 2005).]