COLLEGE FUND LOSSES

Physician's Money Digest, August15 2003, Volume 10, Issue 15

Tip:

If you invested in a 529 collegesavings plan and the value is nowway below your initial investment,you can't claim the loss as a taxwrite-off unless you close out theaccount, along with any other 529plans you may own. The 529 planlosses are like losses on stocks; youdon't reap any tax benefit from theloss on a losing stock until you actuallysell it. Unlike losses on stocks,though, 529 plan losses come underthe heading of miscellaneousdeductions, which means you canonly write off the amount thatexceeds 2% of your adjusted grossincome. If your child won't begoing to college for 5 years or more,it may make more sense to leave themoney where it is.