Mid40s portfolio adjustment suggestions

[Desilva]

Hi
I have one more question. It’s about funding college education for children. I already have contributed a decent amount into their 529 plans. I can contribute more, but I do not want to take risk. So I want the ‘no tax on gains’ benefit for these non-529 amounts for college (maybe 5 year CDs)

So basically I was thinking whether it is a good idea to open these cd accounts in the name of children so that I do not have to pay tax on that interest income for the remaining 5 years as the kids get closer to college. Does it make sense or is there a better option?
-D

[greyfri]

Hi
I have one more question. It’s about funding college education for children. I already have contributed a decent amount into their 529 plans. I can contribute more, but I do not want to take risk. So I want the ‘no tax on gains’ benefit for these non-529 amounts for college (maybe 5 year CDs)

So basically I was thinking whether it is a good idea to open these cd accounts in the name of children so that I do not have to pay tax on that interest income for the remaining 5 years as the kids get closer to college. Does it make sense or is there a better option?
-D

Kids do pay taxes on accrued interest in 5 year CDs. Minimum of 10%

See this

https://www.nolo.com/legal-encyclopedia/kiddie-tax-limits-shifting-unearned-30003.html

And it's their money once gifted, so in theory they could use it for anything they like, not just college :).

[Desilva]

Greyfri
please take a look at line 1 in table 2 at https://www.irs.gov/pub/irs-pdf/p501.pdf
I was thinking I could put upto 25k for each child and earn no more than 1050$ Per year in interest income and get away without even filing a tax return for the child or reporting that income anywhere.
what you sent does not agree with my assessment or maybe my understanding is not right.
please enlighten.
thanks