Educational Savings – 529 / RESP for grandparents?

[zorch]

We are Canadian citizens. We live in the US (permanent residents) with no plans to return to Canada. We have three children (12, 9, 3) who were born in the US. Our plan is for them to attend university in Canada but with a possibility they will instead stay in the US. Their grandparents, retired Canadians, live in Canada and would like to contribute to educational savings plans. What are the tax implications for grandchildren / parents / grandparents of the various alternatives (529, RESP, ???).

Thanks

[nelsona]

First off, they cannot start an RESP for your kids since the kids don't live in canada. Had they lived in canada, the grands could have started one, and it could continue after the kids moved away.

Any 529 plan held by a Cdn resident is fully taxable on yearly internal income, so this is not much use to them.

They should probably just give you the money, and you start a 529. Or give you the money and you/kids invest in tax-managed investements.

[Arteeh]

Nelson is correct regarding 529s vs. RESPs.

For further reading, I suggest the following two websites:

http://www.savingforcollege.com/

http://www.americanfunds.com/college/co ... -chart.htm


Regards,