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Level 2
October 22, 2025
Question

529 for grandkids

  • October 22, 2025
  • 1 reply
  • 46 views

Is it better to set up  529 for our grandkids or give the money to a daughter to invest with her funds, realizing we are not getting a state deduction in MD.  

1 reply

Level 15
October 22, 2025

The growth in the 529 is still tax-free when withdrawn if used for qualifying education expenses, whereas the daughter (or grandchild, if you use a UGTMA) will probably pay 15% long term capital gains when they cash out, and may also pay yearly tax on any dividends.