I’m posing this question because I only found partial answers be searching the forum.
Let’s say as a single father, I made contributions totaling $40K to my kid’s 529 plan at birth (within the yearly exemption) and the plan now has an accumulated value of $100K. Due to circumstances, at 22 years the plan value remains unused. I want to change the beneficiary to my kid’s child.
1. A beneficiary change from my kid to my kid’s child is, for gift tax reporting purposes, treated as a gift from my kid to my kid’s child and not from me to my grandchild, correct?
When I change the beneficiary, for gift tax reporting purposes, is the value of the gift based on the original $40K contribution I made or the current $100K valuation?
If I make the beneficiary change for the entire amount in 1 year (rather than yearly increments) will I impose on my kid a requirement to a file a gift tax return to report any amount in excess of the annual gift tax exclusion amount? Assume the kid is unmarried.
I understand that some state plans may require disbursement after some time interval. Is it true that there is no 529 federal requirement to force a withdrawal after X years and that I will be able to find state plans that will let the money accumulate indefinitely?
Are there any other questions I should be asking?
PS: I discovered this site decades ago and the advice provided then prompted my participation in 529 plans.