User talk:DrJay
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- Tim Doyle, TaxAlmanac Moderator - Talk to me 09:54, 5 January 2007 (CST)
UGMA vs 529
I just got burned on EFC when I filed FAFSA on 1/31. My dad gave my daughter gifts about 16 years ago to build up money for her first home. My EFC without daughter's investments would be $20,000 with them it is $56,000. Vanderbilt, John Hopkins, Carnegie Mellon, etc are all in the $40,000-$50,000 range. If I held those investments in a 529, my EFC would go to $26,500.
Past tax prep experience, if the return can be filed as a 1040A or 1040-EZ, do it. If you file 1040, it may screw up Pell Grants.
Per your Bio, this example might apply to one of your clients. Grandparents have the money. Child is divorced and makes less than $50,000. Grandparents want to gift college money to grandchild. Don't let them. Hold the money until grandchild graduates from college and then gift to child or grandchild to pay off college costs. If death and inheritance is a problem, do a specific bequest (with a payout date if possible). In Virginia, if income level is about $40,000 and no investments, your EFC will be $4,000-$6,000. So if you borrow the full EFC amount each year, at the end of 4 years you would owe just over $24,000 which could be paid off in a couple years of gifting. A pre college gift of $24,000 would increase EFC for the first year to $12,000.
Have fun saving for college.
Mark Eason 13:22, 1 February 2007 (CST)
Hi there, I see that you had mentioned that you tranferred props into LLC. I was looking to do the same thing but was wondering about the transfer tax. Is it still subject to that? Any help would be appreciated.
Thank you Frank
Hi Dr Jay
Dr Jay, I'm in Georgia. I did not mean to criticize the uncle, maybe he had a good reason to do this. However, I think it's overkill for something they are only going to hold onto for one year. Perhaps if the investors are doctors or something, it makes sense BUT as you know, IF they are already expecting a lawsuit, THIS SMLLC will not protect their assets. Woops, need to add my name. CrowJD 11:35, 16 September 2007 (CDT)
