Maximum Contributions
Maximum contribution for all account owners on behalf of any 1 beneficiary: $150,000
Notes:
As I just mentioned, the maximum amount you can invest in a Scholars Choice account for any one beneficiary is $150,000. This maximum, which is set by the State of Colorado, is one of the highest limits of any college savings plan available today.
If you’re like most people, however, you want to make investments while avoiding gift taxes. You can do this in 2 ways:
1. First, you can make an annual contribution of up to $10,000 ($20,000 for married couples) per beneficiary. The $10,000 exclusion rule has existed for some time. Scholars Choice, however, offers you a new way to avoid gift taxes -- a way that is exclusive to Section 529 college savings plans…
2. You can invest as much as $50,000 per beneficiary (that’s $100,000 for married couples) in one year if you do not make further gifts to the same beneficiary over the next four years. Your investment is not subject to gift taxes, and, after five years, is excluded from your taxable estate.1
Here’s how it works: If you were to invest, for example, $30,000 for one child in one year, your $30,000 investment would be treated as 5 equal gifts of $6,000 each over the 5-year period. You could make additional gifts to the beneficiary of up to $4,000 in each year without incurring gift taxes.
1 For contributions between $10,000 and $50,000 made in one year, if the account owner dies before the end of the 5-year period, a prorated portion of the contribution will be included in his or her taxable estate.