Author Topic: Laundering money through a 529 ?  (Read 1048 times)

SomedayStache

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Laundering money through a 529 ?
« on: June 25, 2021, 02:28:51 PM »
Hoping thread title gets some more eyeballs on this =)

I've taken 2 college courses for fun this year (one in the spring and one in the summer.) I paid tuition money in January 2021 and May 2021 for these classes.

Do you think I can open a 529 with myself as the beneficiary and claim my state's (Oklahoma) 529 tax credit for 2021?

I have perused the Oklahoma 529 website and haven't seen any notice of a required holding period. I know that this is a 529 "hack" that numerous internet articles mention, but the point that worries is me is that the date of the 529 opening is going to fall after the date of tuition payments. Any thoughts, comments, or silly remarks?

Morning Glory

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Re: Laundering money through a 529 ?
« Reply #1 on: June 25, 2021, 02:36:49 PM »
I know that Minnesota's credit and deduction are on contributions net of withdrawals in the same year to prevent this very scheme. You will have to check the rules for Oklahoma to see if it's allowed.

secondcor521

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Re: Laundering money through a 529 ?
« Reply #2 on: June 25, 2021, 02:47:31 PM »
I think you can.  Here are my notes when I was looking at it for my son's GF (who was attending an OK school at the time):

529 rinse
   OK Form 511-C line C4
   Max $10K per year
   Can contribute up to April 15 of following year
   Meh, 5%

SomedayStache

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Re: Laundering money through a 529 ?
« Reply #3 on: June 26, 2021, 06:17:31 AM »
I'll definitely be looking at the tax forms and dig into this some more.

 

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