529 (or Ed IRA) to 529 rollover? I got some questions

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privateID
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Joined: Sat Oct 18, 2014 4:59 pm

529 (or Ed IRA) to 529 rollover? I got some questions

Post by privateID »

It is my understanding that if I withdraw money from a 529 (or Education IRA) and contribute the same amount of money to a different 529 with the same beneficiary within 60 days, then the withdrawal is considered a qualified withdrawal. I have some questions that I am not sure about after Googling this topic. Simple example: I withdraw $10K from a 529 with child A as the beneficiary on Jan 15, 2023 and then deposit it into a different 529 with child A as the beneficiary on Mar 15, 2023.

1) I have read in the past that this can only be done once every 365 days. Is that still a rule? I understand that was a rule on a rollover. Is this considered a rollover or a qualified distribution and new contribution?

2) If (1) is a rule, what dates does one use? Let's say I made a similar transaction the previous year around the same dates. If I had made a withdrawal the previous year on Jan 20, 2022 does that make this year's non-qualified? If I made the deposit last year was on Mar 20, 2022 does that make this year's non-qualified?

3) If I do such a transaction, do I need to report the cost basis to the new 529? I assume the reason you may need to would be if you were to later on make an unqualified withdrawal. If I don't, but I eventually use it all as qualified withdrawals, is that a problem?

Thanks for any clarifications anyone can offer.
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