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Max out Section 529 plan gifts

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in Small Business Tax

Do you want to help put young grandchildren through college? Establish Section 529 plan accounts and name the kids as the account beneficiaries. Future distributions for qualified higher-education expenses are tax-free.

Extra benefit: Normally, such transfers are sheltered from gift tax by a limited annual exclusion ($13,000 per child for 2010). For a lump-sum contribution to establish a Section 529 plan account, however, you can take advantage of up five years' worth of exclusions to shelter the initial contribution ($65,000 for 2010). 

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