Publication 970
Tax Benefits for Education

For use in preparing 2002 Returns

Can You Transfer Amounts
or Change Beneficiaries?

Amounts in a QTP can be transferred or rolled over tax free to the QTP of another beneficiary. The transfer or rollover must be completed within 60 days of the distribution and the new beneficiary must be a member of the same family (defined later) as the original designated beneficiary.

Starting in 2002, amounts in a QTP of one beneficiary can be transferred or rolled over tax free to another QTP for the same beneficiary. However, a tax-free transfer or rollover cannot be made more than once within any 12-month period with respect to the same beneficiary.

The beneficiary of a QTP can be changed without transferring accounts. However, the new beneficiary must be one of the family members listed next.

Family members.   The amounts in a QTP can be transferred tax free to the designated beneficiary's spouse or any of the following other members of the beneficiary's family.

1. Son or daughter or descendant of son or daughter.
2. Stepson or stepdaughter.
3. Brother, sister, stepbrother, or stepsister.
4. Father or mother or ancestor of either.
5. Stepfather or stepmother.
6. Son or daughter of a brother or sister.
7. Brother or sister of father or mother.
8. Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
9. The spouse of any individual listed above.
10. First cousin.

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