College 529 Plan

Q: I was reading an interesting article on capital gains and 529 plans on your web site. However, I still am a bit confused.

I've recently sold my rental property and would like to put all the profit I have made from this sale into a college 529 plan.

This is what I intended to do when I originally purchased the property. But most importantly want to avoid the capital gains taxed on the investment. Is this possible to do? Could you explain or direct to the proper procedure in doing so? Thanks, your help is greatly appreciated.

A: If you want to take the proceeds of the property and put it in a 529 plan then you will be taxed on the gains of the property sale. The only way to avoid those taxes is to move that money into other property through a Like-Kind Exchange.

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