With multiple Roth IRA accounts, distribution ordering rules treat all accounts as one. Does this rule generally also apply to 529 accounts?
That is, if I am the owner on multiple 529 accounts, are they treated as one when determining pro-rata distributions (e.g. in the case of nonqualified return of principle).
- Account 1: $1000 contributions + $1000 gains
- Account 2: $1000 contributions + $0 gains
I withdraw $1000 from Account 2 as part of a nonqualified distribution (e.g. I just want my money back / I decided I want to reverse the contribution). Is this considered 100% distribution of contributions or pro-rata 2/3 contributions + 1/3 earnings?
Does the beneficiary designation on any of the accounts affect the tax treatment?