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Closing a 529 account

I have been contributing to two 529 accounts, one for my niece and one for my nephew. There is about $32,000 in each account. As it turns out, my niece and nephew are not going to need this money, and I have no one else in mind and no other educational use for the money. So, I want to close both accounts. I know I will have to pay tax on the gains in the account, and I know there is some kind of 10% penalty but I am not sure what that is (10% of what?).

But, here is my real question: I am 59 and will soon be 59 1/2. Does it make any difference if I close the 529 account before I am 59 1/2 instead of after I turn 59 1/2? I assume it makes no difference because it's not the same as an IRA that I would have in my name, but I thought I'd check just to be sure. I am also going to check with the plan administrators (or whatever they are called), but I thought I'd also ask here in case they give me erroneous information.

Thanks.

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BETA-32
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I just found out the answer. Being older or younger than 59 1/2 has no impact. I will receive the entire balance from the company then will have to pay ordinary income tax on the gain, plus pay an additional penalty of

10% of the gain. Basically, 32 K went into each account, but they say the accounts are now each worth 38K. So if I close the accounts, for each account I will receive a check for 38K, then will owe tax on the 6K gain plus a penalty of $600 (10% of the gain).
Reply to
BETA-32

unless you attend school and use the $ for your own education expenses...

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~^ beancounter ~^

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