Q:
Subject: Increasing Gifting Limit to $12,000
Hello:
I saw your post on savingforcollege.com. I was wondering if you could answer a question.
If I used my $55,000 contribution for a college 529 plan in 2005 (11,000 X5) for contributions to 2009, can I add an additional $4,000 to what I have already contributed to make up for the accelerated gifting to $60,000. What would the procedure be?
Thank you very much for your time.
Rob
A:
That wasn’t me posting there; but someone who found that info on my website.
The response to your questions from Joe Hurley sounds right.
No you cannot, because as the law is currently written your 2006 contribution must be more than $12,000 to be eligible for the spreading election. A $4,000 contribution would not be enough. You could make $1,000 contributions in each of the next four years to stay within the new, higher annual exclusion.
Joe
Good luck.
Kerry Kerstetter
Tax Guru - Ker$tetter Letter 