Can you fund a 529 with appreciated stock?

A gift of appreciated stock can be a great way to fund education. On the other hand, as you mention, a 529 account has several advantages, but a 529 only accepts cash, not stock or other assets.

Can you gift stock appreciated?

Stocks can be given to a recipient as a gift whereby the recipient benefits from any gains in the stock’s price. Giving the gift of a stock can also provide benefits for the giver, particularly if the stock has appreciated in value since the giver can avoid paying taxes on those earnings or gains.

Can I transfer stock to a 529 account?

At the time of publication, regulations regarding 529 plans did not permit anyone to transfer stock directly into 529 plans, as stated by Barbara Whelehan of Bankrate.com. You can only make cash contributions. This means that, in order to convert stock into a 529 plan, you must convert your stock to cash.

Can you gift appreciated stock to your child?

High income parents subject to California’s 37.1% capital gains tax rate could gift shares of appreciated stock to their children living in Washington who could then sell the stock and not be subject to any capital gains tax. Ten years ago gifting appreciated stock was the preferred financial planning method for funding a child’s college education.

What happens if you give a stock as a gift?

But instead of selling the stock, you could give it as a gift, transferring the gains to the recipient. “The person who received the stock now has that appreciated stock. They can hold it if they want, but if they sell it, assuming they’re in a lower tax bracket, they might pay 0% in capital gains taxes,” Schwartz says.

Do you have to report stock you give to your daughter?

So if the fair market value of the stock you give your daughter is $15,000 or less at the time you give it to her, there’s likely no filing required. If you give her more than $15,000 in a single year, you’ll need to report the gift, and it would apply to your lifetime exemption.

What’s the limit for gifting stock to a family member?

Gifts of stock can be made in lieu of giving cash. The annual gifting limits of $15,000 per person ($30,000 for a joint gift with your spouse) apply, and the value of the stock on the day of the transfer constitutes the amount of the gift.