Frequently Asked Questions Select a Category: Make A Selection General Prepaid Withdrawals Tax Ownership Investment Choosing a Plan Beneficiaries Coverdell Show All Tax 4. If my 529 plan accounts decline in value and I take a distribution from the plans, can I deduct the loss on my tax return?       This issue has not specifically been addressed by Congress or in Treasury Regulations.  Some tax professionals argue that the loss can be claimed as a miscellaneous itemized deduction on your tax return.  However, that means it is only deductible to the extent it (and other miscellaneous itemized deductions) exceed 2% of your adjusted gross income.   1. Are there any tax advantages to a 529 Plan? 2. What is the advantage of the 529 Plan over the Uniform Gift to Minor's Act (UGMA) or UTMA? 3. Who gets taxed when a withdrawal is not used for a “qualified education expense”? 5. My twelve year old daughter inherited an IRA from her deceased grandmother. If I cash in the IRA and pay the taxes, may I open a 529 account with that money she inherited and use it for her college expenses? 6. What was all the discussion about “tax–free withdrawals being due to expire in 2010?” Was that the same as ‘sunset’? 7. Where can I find more information on federal tax benefits for paying for college? Still Need Help? Ask An Expert Do you want guidance in selecting a 529 plan?  Click the Contact Us button below and speak to a live advisor, or drop us an email and we will be pleased to assist you. If you are a do-it-yourself person, click the Professor for his assistance in sorting and ranking plans or click on the National Map to locate a specific state's 529 program.
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