Frequently Asked Questions Select a Category: Make A Selection General Prepaid Withdrawals Tax Ownership Investment Choosing a Plan Beneficiaries Coverdell Show All Tax 7. Where can I find more information on federal tax benefits for paying for college?       The IRS’s Publication 970 offers a good explanation of the federal tax treatment for Coverdell Education Savings Accounts and 529 Plans (also known as Qualified Tuition Programs, or “QTP’s”), as well as tax treatment for student loans, scholarships, and other tax benefits related to paying for higher education.   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”? 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? 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’? 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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