Yesterday I contributed $20,000 to my son’s 529, and I then remembered the $16,000 annual gift tax limit. Since I’m still within the same tax year can I correct this to keep the contribution under the $16,000 limit.
Possible solution I’m thinking about:
Withdraw the $4,000 (in the same tax year).
Ask my plan provider to do a “correction” (if that’s a thing) to adjust the money transfer to $16,000 and send back $4,000 of it.
Have my domestic partner, the beneficiary’s mom, write me a check for $4,000 to reimburse me for her share of the contribution, and just call this a joint contribution from both of us.
Would any of those work? Any other idea to fix this without a form 709 or doing the 5 year contribution? Thank you.
a contribution is considered a completed gift. you can't take back a gift. (it's the legal challenges rather than any tax challenges) that leaves is filing form 709 or the 5-year route which also requires filing form 709.