We will be transferring funds from a state guaranteed tuition plan into another 529 account. If we transfer 100% of it within 60days, it will not be taxed. However, if we retain say 10% of it for nonqualified uses ... how is the portion calculate that will be penalized and taxed ? e.g. Can we retain only the original basis, and roll over only the earnings ... hence no taxes? or is a withdrawal valued as the pro rate split of basis: earnings same as the total amount coming out of the state fund. thank you