With all the brouhaha surrounding the recent negotiations between the White House and Congress regarding the limit and tax rate for estates and gifts, one area that has failed to garner any attention is whether the definition of gifts should exclude 529 college saving plans. Arguably, these transfers should be exempt from the definition for federal tax purposes in the same manner as direct tuition or medical payments. Moreover, the current gift exclusion structure arbitrarily diminishes college saving plans’ potential growth for children of single or unmarried or divorced parents with unequal asset power.

http://www.huffingtonpost.com/liz-mandarano/529-college-savings-plan-_b_810361.html