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Can I move $ from a mutual fund in my daughter's name to a 529 plan without paying taxes?
I have a 529 plan set up for her that I contribute to currently. I also have a mutual fund that I started contributing to in 1996 and ended in 2002. I want to move the money in the mutual fund to the 529 because it isn't increasing in value like it used to. Will I have to pay taxes on it when I move it?
- ninasgrammaLv 71 decade agoFavorite Answer
Your daughter owns the mutual fund, but you probably own the 529. Any funds moved from the child's mutual fund into your 529 plan would still be subject to the rules for custodial accounts. For this reason you may want to open a separate 529 plan for this money and not commingle it with you original 529 money.
If the gain is $850 or less, and the child has no other income, there is no tax due. Between $851 and $1700, the gain will be taxed to your daughter at her rate. Gain in excess of $1700 will trigger the kiddie tax and she will be taxed at your rate.
If there are large gains you may want to move the money over more than one year.
- jseah114Lv 61 decade ago
Yes. Selling the shares in the mutual fund will be treated as a taxable sale that is reported on Schedule D. You will be taxed on the gain from the sale, which is the sales proceeds, net of commission, less your purchase price, net of commission.
- 1 decade ago
Ask the company or issuing bank you have the mutual fund with.
- 1 decade ago
i think you can but i 'll check with my CPA