Other gift tax rules
For purposes of chapters 12 and 13—
(A) Treatment of distributions
(A)Treatment of distributions#
Except as provided in subparagraph (B), in no event shall a distribution from a qualified tuition program be treated as a taxable gift.
(B)Treatment of designation of new beneficiary#
The taxes imposed by chapters 12 and 13 shall apply to a transfer by reason of a change in the designated beneficiary under the program (or a rollover to the account of a new beneficiary) unless the new beneficiary is—
(i) assigned to the same generation as (or a higher generation than) the old beneficiary (determined in accordance with section 2651), and
(ii) a member of the family of the old beneficiary.
(B)(i)#
assigned to the same generation as (or a higher generation than) the old beneficiary (determined in accordance with section 2651), and
(B)(ii)#
a member of the family of the old beneficiary.