“When the thesis changes, you have to change with it,” says portfolio manager Julian Abdey. From earning the nickname Dr. Doom as a bank analyst in the leadup to the global financial crisis to scenario planning throughout the pandemic, Julian has honed the skill of doing his own research to gain an edge and stay ahead of change by embracing it. He sits down with Mike Gitlin to discuss how he gains conviction, where he sees potential “oaks” among small-cap “acorns,” and how his brief foray into life as an academic economist influences his approach to risk management. 

The U.S.-led trade war may change globalization in a profound way, but it won’t kill it, says Capital Group portfolio manager Steve Watson, a global equity investor with 37 years of experience. “Globalization isn’t dead,” he insists. 

1. $160,000 
2. $320,000 
3. $480,000
4. $760,000
5. $1,280,000
6. No limit

Answer = #3. $760,000

 

In 2025, the annual gift tax exclusion is $19,000 per recipient for an individual donor, or $38,000 per recipient for a married couple filing jointly who elect to split gifts. Since the grandparents are setting up 529 plans for their four grandchildren, they can take advantage of this exclusion for each grandchild. Additionally, 529 plans offer a unique option called 5-year gift-tax averaging, which allows them to front-load up to five years' worth of gifts in a single year without incurring gift tax, as long as they don’t make additional gifts to the same beneficiary during the next four years.

 

Here’s how it works for the grandparents in 2025:

• As a married couple, they can contribute up to $38,000 per grandchild in a single year without it being a taxable gift. For four grandchildren, this would be:
    - $38,000 × 4 = $152,000 total
• With 5-year gift-tax averaging, they can contribute up to five times the annual exclusion amount per grandchild in one lump sum, treated as if spread evenly over five years. For 2025, this means:
•  $19,000 × 5 = $95,000 per grandchild per grandparent.
•  Since they’re a married couple, they can double this to $190,000 per grandchild ($95,000 from each spouse).
•  For four grandchildren, this would be: $190,000 × 4 =$760,000 total

Thus, the maximum the grandparents can contribute in 2025 to the four 529 plans without making it a taxable gift is $760,000, provided they elect the 5-year averaging option and file IRS Form 709 to report it. This assumes they make no other gifts to these grandchildren over the next four years. If they prefer to contribute annually without the 5-year election, the maximum would be $152,000 for 2025. They should consult a tax advisor to confirm their specific situation and ensure compliance with IRS rules.

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