Systems and methods for determining an earnings portion of a distribution from a 529 plan
View Patent ↗A method for determining an earnings portion of a distribution from a 529 plan. The method includes receiving information associated with a plurality of 529 plan accounts, identifying related 529 plan accounts, aggregating the information for related 529 plan accounts, and determining an earnings portion of a distribution from at least one of the 529 plan accounts.
1. A method for determining an earnings portion of a distribution from a 529 plan, the method comprising:
receiving information associated with a plurality of active 529 plan accounts, wherein receiving information includes receiving the following for each 529 plan account:
a fair market value;
a value for life-to-date contributions; and
a value for life-to-date return of investment;
identifying, using a computing device comprising at least one processor, related 529 plan accounts, wherein identifying related 529 plan accounts includes identifying 529 plan accounts having a common beneficiary or having a common beneficiary and owner;
aggregating, using the computing device, the information for related 529 plan accounts; and
determining an earnings portion of a distribution from at least one of the 529 plan accounts based on the following equation:
EP
=
MV
-
(
C
-
ROI
)
×
D
MV
where EP equals the earnings portion, MV equals an aggregate market value, C equals an aggregate value of contributions, ROI equals an aggregate value of return of investment, and D equals the distribution amount.
2. The method of claim 1 , wherein receiving the information includes receiving the information from a plurality of sources.
3. The method of claim 1 , wherein receiving the information includes receiving the following for each 529 plan account:
a state plan identification number;
an owner identification number; and
a beneficiary identification number.
4. The method of claim 3 , wherein receiving the owner identification number includes receiving a social security number of an owner.
5. The method of claim 3 , wherein receiving the beneficiary identification number includes receiving a social security number of a beneficiary.
6. The method of claim 1 , wherein aggregating the information for related 529 plan accounts includes aggregating UGMA/UTMA accounts separately from non-UGMA/UTMA accounts.
7. The method of claim 6 , wherein aggregating the information for related 529 plan accounts includes aggregating the information for 529 plan accounts having a common beneficiary.
8. The method of claim 6 , wherein aggregating the information for related 529 plan accounts includes aggregating the information for 529 plan accounts having a common owner/beneficiary combination.
9. The method of claim 1 , further comprising determining a return of investment portion of the distribution.
10. The method of claim 1 , further comprising determining when a maximum limit associated with a 529 plan account beneficiary is reached.
11. The method of claim 10 , wherein determining when the maximum limit is reached includes determining when an aggregate market value for 529 plan accounts having a common beneficiary reaches a maximum value.
12. The method of claim 10 , wherein determining when the maximum limit is reached includes determining when an aggregate total for life-to-date contributions for 529 plan accounts having a common beneficiary reaches a maximum value.
13. A system for determining an earnings portion of a distribution from a 529 plan, the system comprising:
a first computer-readable medium comprising a database to store information associated with a plurality of active 529 plan accounts, wherein the stored information for each 529 plan account comprises:
a fair market value;
a value for life-to-date contributions; and
a value for life-to-date return of investment; and
a processor in communication with the first computer-readable medium, wherein the processor is responsive to instructions stored on a second computer-readable medium of the system to:
receive the information associated with a plurality of 529 plan accounts from the database;
identify related 529 plan accounts by identifying 529 plan accounts having a common beneficiary or having a common beneficiary and owner;
aggregate the information for related 529 plan accounts; and
determine an earnings portion of a distribution from at least one of the 529 plan accounts based on the following equation:
EP
=
MV
-
(
C
-
ROI
)
xD
MV
where EP equals the earnings portion, MV equals an aggregate market value, C equals an aggregate value of contributions, ROI equals an aggregate value of return of investment, and D equals the distribution amount.
14. A computer-readable medium comprising instructions stored thereon, which, when executed by a processor, cause the processor to:
receive information associated with a plurality of active 529 plan accounts, wherein receiving information includes receiving the following for each 529 plan account:
a fair market value;
a value for life-to-date contributions; and
a value for life-to-date return of investment;
identify related 529 plan accounts, wherein identifying related 529 plan accounts includes identifying 529 plan accounts having a common beneficiary or having a common beneficiary and owner;
aggregate the information for related 529 plan accounts; and
determine an earnings portion of a distribution from at least one of the 529 plan accounts based on the following equation:
EP
=
MV
-
(
C
-
ROI
)
xD
MV
where EP equals the earnings portion, MV equals an aggregate market value, C equals an aggregate value of contributions, ROI equals an aggregate value of return of investment, and D equals the distribution amount.
15. The computer-readable medium of claim 14 , comprising instructions stored thereon, which, when executed by the processor, cause the processor to determine when a maximum limit associated with a 529 plan account beneficiary is reached.