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Tax Advantages Read about the key tax advantages of CollegeBoundfund®. Tax-Free Earnings Growth and Tax Free Withdrawals First, there is no federal income tax due on any earnings while they are in your CollegeBoundfund account. And distributions for qualified education expenses* are federal income tax free, too. As an added benefit, many states may also allow the earnings of your CollegeBoundfund account to grow state income tax free. (If you are a resident of Rhode Island, your earnings grow state income tax-free as well.) Because your CollegeBoundfund earnings—including capital gains and dividends—are tax free, your account may grow faster than an identical taxable account. The chart below shows how. Tax Free Account vs. Taxable Account This hypothetical example assumes a one-time lump-sum investment of $10,000, an 6% annual rate of return and a combined federal and state tax rate of 35%. The tax-free account assumes tax-free growth at both the federal and state levels. The tax-free account may be subject to taxation upon withdrawal. This does not represent the performance of any particular investment including CollegeBoundfund or any AllianceBernstein mutual fund. Your results may be more or less. Special Gift and Estate Tax Treatment CollegeBoundfund allows for a special gift tax exclusion. In general, you can contribute up to $65,000 ($130,000 for married couples) for each beneficiary in a single year without paying federal gift taxes, as long as you don't make any additional gifts to that beneficiary over a five year period. Also, the contributions you make to your CollegeBoundfund account are excluded from your taxable estate for federal estate tax purposes.† Of course, you should consult your tax advisor or accountant to determine how your individual tax situation will be affected. *Qualified education expenses include tuition, fees, room and board, books and other supplies needed for the attendance of a student at an institution of higher education. A 10% penalty or additional tax on the earnings withdrawn for non-qualified expenses will apply. Please see the Program Description for more specific information. †Subject to an “add-back” rule in the event of the contributor's death within five years.

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