Deducting 529 Plan Losses
Thanks to their beneficial tax treatment, qualified tuition programs (QTPs – commonly referred to as 529 plans) have become the plan of choice for many taxpayers trying to save enough money to cover the ever-escalating costs of getting their child or grandchild through college. Over the last several years, many folks have invested a considerable amount of money in these plans. Unfortunately, the market has not been any kinder to these plans than to the rest of us. So, we venture to say there are more than a few taxpayers out there who have QTPs worth less than what they put into them. That begs the question: Are the losses deductible? Better yet, can I liquidate the account, claim a loss, and then reinvest the proceeds in another QTP for my child or grandchild?
Yes – according to the IRS, a loss on a QTP is deductible by the account owner (the person who controls the account – typically the contributor), but only when all amounts from that account have been distributed and the total distributions are less than the contributor’s unrecovered basis (contributions made to the account less any prior withdrawals of those contributions). Unfortunately, the loss must be deducted as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit. Also, the funds can’t be reinvested too soon. The IRS indicates that distributions rolled over to another QTP for that or another related beneficiary within 60 days of the distribution are not taxable. Thus, if an account that is worth less than what was put in it is rolled over within 60 days, there are no tax consequences, meaning no loss deduction. Read more
Deducting 529 Plan Losses
Thanks to their beneficial tax treatment, qualified tuition programs (QTPs – commonly referred to as 529 plans) have become the plan of choice for many taxpayers trying to save enough money to cover the ever-escalating costs of getting their child or grandchild through college. Over the last several years, many folks have invested a considerable amount of money in these plans. Unfortunately, the market has not been any kinder to these plans than to the rest of us. So, we venture to say there are more than a few taxpayers out there who have QTPs worth less than what they put into them. That begs the question: Are the losses deductible? Better yet, can I liquidate the account, claim a loss, and then reinvest the proceeds in another QTP for my child or grandchild?
Yes – according to the IRS, a loss on a QTP is deductible by the account owner (the person who controls the account – typically the contributor), but only when all amounts from that account have been distributed and the total distributions are less than the contributor’s unrecovered basis (contributions made to the account less any prior withdrawals of those contributions). Unfortunately, the loss must be deducted as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit. Also, the funds can’t be reinvested too soon. The IRS indicates that distributions rolled over to another QTP for that or another related beneficiary within 60 days of the distribution are not taxable. Thus, if an account that is worth less than what was put in it is rolled over within 60 days, there are no tax consequences, meaning no loss deduction. Read more
Deducting 529 Plan Losses
Thanks to their beneficial tax treatment, qualified tuition programs (QTPs – commonly referred to as 529 plans) have become the plan of choice for many taxpayers trying to save enough money to cover the ever-escalating costs of getting their child or grandchild through college. Over the last several years, many folks have invested a considerable amount of money in these plans. Unfortunately, the market has not been any kinder to these plans than to the rest of us. So, we venture to say there are more than a few taxpayers out there who have QTPs worth less than what they put into them. That begs the question: Are the losses deductible? Better yet, can I liquidate the account, claim a loss, and then reinvest the proceeds in another QTP for my child or grandchild?
Yes – according to the IRS, a loss on a QTP is deductible by the account owner (the person who controls the account – typically the contributor), but only when all amounts from that account have been distributed and the total distributions are less than the contributor’s unrecovered basis (contributions made to the account less any prior withdrawals of those contributions). Unfortunately, the loss must be deducted as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit. Also, the funds can’t be reinvested too soon. The IRS indicates that distributions rolled over to another QTP for that or another related beneficiary within 60 days of the distribution are not taxable. Thus, if an account that is worth less than what was put in it is rolled over within 60 days, there are no tax consequences, meaning no loss deduction. Read more
With Debt Consolidation bad Credit Can Be Fixed
With debt consolidation bad credit can be fixed. When looking for debt consolidation bad credit is a problem that needs to be fixed before you can get more control over your finances. If you’re up to your neck in debt and behind on your loan payments, chances are good you already have the problem of bad credit. While you may have once had a very good credit rating, changes in your financial situation may have led you to get behind, and the result of that new financial hardship is that you suddenly find yourself with a bad credit rating. That means finding a reasonable loan at a reasonable rate may no longer be an easy thing to accomplish.
You are one of many who are trying hard and looking for a strategy to get out of the hole your in. But when looking for debt consolidation bad credit could keep that from happening. If you find yourself up to your neck in debt and always having trouble making just the minimum payments, debt consolidation may be one way to ease your payment problems. Read more
Make The Right Decisions with a Debt Consolidation Loan Calculator
If you are up to your ears in debt, you may want to consider a debt consolidation loan as a strategy to help with the debt you are faced with. Before you consider taking any action toward a consolidation you should get the knowledge to understand how various debt consolidation loans will affect your overall financial situation. One thing to consider using a debt consolidation loan calculator to help you figure out how any financial decisions will affect your goal of trying to manage your debt without making your situation worse.
There are many strategies to think about when looking for a debt consolidation loan, some of which have advantages over simply allowing you to restructure your debt. Some consolidations loans may want you to use equity you have in your home as a way to secure the amount of debt you want to refinance. Other debt consolidation loans may be offered that are unsecured, but these loans will come with a much higher rate. An online debt consolidation loan calculator would be very useful as you start to work with the numbers. You may want to take the time to find a calculator that will help you sort out the many different ways you can achieve you goal of getting your debt under control. Read more
Debt Relief Consolidation, 3 Helpful Tips
If you are in debt it can affect your life in many ways and especially in a bad economy. There have been many studies that have shown that financial problems and the stress caused by them can have a terrible effect on us physically and emotionally. If you feel like you’re up to your neck in debt, you may think that you won’t be able to find relief or get back on the right track again. But despite tougher financial times affecting many, there are agencies and lenders available to help you with debt relief consolidation. If you begin to look for help with your debt problem, you’ll soon find that there are three basic types of debt relief consolidation: debt consolidation loans, credit card balance transfers, and credit management or counseling agencies.
1.) With the case of a debt consolidation loan, a lender will pay off several of your debts and create a new loan for you that will come with lower monthly payments than the combined payments of the initial debts. Be careful of debt relief consolidation through a loan, because if you don’t check the loan parameters carefully, you may not get exactly the type of help you’re looking for. In some cases, lenders want you to focus on the monthly payment and not on the total payback amount. This is because they may be offering you a lower payment but at a substantially higher interest rate. They achieve a lower payment by stretching the payback out over a much longer period. In that case, you may find that you will end up paying far more in interest than you would have had you simply stuck with the original loans. Read more
Non Profit Debt Consolidation Has Advantages For You
In today’s world, credit trouble is something that can hit just about anyone. The unstable economy is becoming big trouble for most hard working people and managing your debt can be very hard in uncertain times. If you are having trouble with your monthly payments, you may think about a debt consolidation as a good way to help you get back on the right road again. With a debt consolidation, you can lower your total monthly payment and, in some cases, reduce the total amount that you owe. If you’re looking for a debt consolidation, there are quite a wide variety of options available to you, and among those are both for-profit companies and non profit debt consolidation agencies.
It is important that you understand that this type of debt consolidation is completely different from a debt consolidation loan. Whether it be a for-profit or a non-profit debt consolidation agency, you should not expect these sorts of consolidators to provide you with a loan to pay off existing balances. Sometimes a debt consolidation loan can actually put you in a worse financial problem, because rather than reduce your obligation and lower your interest rates, some of these loans actually have a higher rate but can reduce your payments by extending the payment period for many more months or years. Instead of a loan, these kinds of companies will represent you to the creditors and work out an arrangement. They will agree to lower your interest rate and your payments, while possibly reducing the total amount that you owe and, if all goes as planed, keeping your credit score from being hurt to bad. Read more