Short Video on the Myths and Facts of 529 Gift Limits

The Annual Gift Tax Exclusion for 2020 is $15,000 per individual. This planning assumes no other gifts being made to the donee by the contributor. Contributions to an account for a beneficiary between $15,000 and $75,000 can be prorated over a five-year period without incurring federal gift taxes or reducing an investor's unified estate and lifetime gift tax credit amount of $11.58 million (2020). If the account owner dies before the end of the five-year period, a prorated portion of the contribution will be included in his or her taxable estate. Federal gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given beneficiary in the year of contribution if the investor has used up his/her unified estate and gift tax credit.
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An investor should consider the Program’s investment objectives, risks, charges and expenses before investing. The Program Disclosure Statement and Participation Agreement (www.scholars-choice.com/pds) contains more information and should be read carefully before investing. If an investor and/or an investor’s beneficiary are not Colorado taxpayers, they should consider before investing whether their home states offer 529 plans that provide state tax and other benefits such as financial aid, scholarship funds and protection from creditors that are only available to state taxpayers investing in such plans.
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