Date: Wed, 16 Feb 2005 16:46:37 CST
From: "DMP" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Q about 529 - college savings
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just like an Roth IRA, you can take out your contributions(what you put
in) at any time. You will be charged a 10% penalty and be subject to
ordinary income tax on the earnings portion of the 529 account value.
SO say you put in 5,000 this year and in two years the account value is
worth 6,000. That 5,000 you put in, you can take that out with no
problem. The amount you take above 5,000 is subect to the 10% penalty
and ordinary income tax. So lets say you withdraw the whole 6,000 and
you're in the 28% tax bracket. $1000 x .38 = $380. $1000-$380=$620.
Your total withdrawal is $5620. The thing is you wont be charged on
this when you take it out. You will just have to report on your tax
form.