How to Deduct 529 Plan Losses.
Kiplinger's Ask Kim Web Column, December, 2002
Byline:Kimberly Lankford, Kiplinger Washington Editors
I opened a 529 plan for my daughter two years ago and invested $10,000. Now the account is worth $7,000. Can I close out the account and deduct a loss from my income taxes?
You ask at a great time. The last time we answered this question, we had to hedge a bit because the IRS hadn't issued specific guidelines about writing off 529 losses. But we predicted that they would eventually issue rules letting you deduct 529 losses much like the way you can with losses from IRAs.
Sure enough, that's what ended up happening. The IRS just issued the newest version of Publication 970, Tax Benefits for Higher Education, and included the exact same 529 write-off rules that we anticipated (see...
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