What is Five-year election for 529 contributions?
In short
A donor can contribute up to five times the gift tax annual exclusion to a section 529 plan in one year and elect to treat it as made evenly over five years, so it is covered by the annual exclusion.
Key takeaways
- That is $95,000 per beneficiary in 2025, or $190,000 for a married couple splitting gifts.
- The election is made on a gift tax return.
- If the donor dies within the five years, the part for the remaining years is in the estate.
Where it's tested
TCP: Personal Financial Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An employee receives disability benefits under a policy for which the employer paid all premiums and excluded them from the employee's taxable wages. How are the benefits taxed?