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2011 Tax Return Form

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2011 Tax Return Form

2011 tax return form Publication 503 - Introductory Material Table of Contents Future Developments Reminders IntroductionOrdering forms and publications. 2011 tax return form Tax questions. 2011 tax return form Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 503, such as legislation enacted after it was published, go to www. 2011 tax return form irs. 2011 tax return form gov/pub503. 2011 tax return form Reminders Taxpayer identification number needed for each qualifying person. 2011 tax return form  You must include on line 2 of Form 2441, Child and Dependent Care Expenses, the name and taxpayer identification number (generally the social security number) of each qualifying person. 2011 tax return form See Taxpayer identification number under Qualifying Person Test, later. 2011 tax return form You may have to pay employment taxes. 2011 tax return form  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. 2011 tax return form Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. 2011 tax return form See Employment Taxes for Household Employers, later. 2011 tax return form Photographs of missing children. 2011 tax return form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 2011 tax return form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2011 tax return form You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 2011 tax return form Introduction This publication explains the tests you must meet to claim the credit for child and dependent care expenses. 2011 tax return form It explains how to figure and claim the credit. 2011 tax return form You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. 2011 tax return form The credit can be up to 35% of your expenses. 2011 tax return form To qualify, you must pay these expenses so you can work or look for work. 2011 tax return form This publication also discusses some of the employment tax rules for household employers. 2011 tax return form Dependent care benefits. 2011 tax return form   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. 2011 tax return form You must complete Form 2441, Part III, before you can figure the amount of your credit. 2011 tax return form See Dependent Care Benefits under How To Figure the Credit, later. 2011 tax return form Comments and suggestions. 2011 tax return form   We welcome your comments about this publication and your suggestions for future editions. 2011 tax return form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2011 tax return form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2011 tax return form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2011 tax return form   You can send your comments from www. 2011 tax return form irs. 2011 tax return form gov/formspubs/. 2011 tax return form Click on “More Information” and then on “Comment on Tax Forms and Publications. 2011 tax return form ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2011 tax return form Ordering forms and publications. 2011 tax return form   Visit www. 2011 tax return form irs. 2011 tax return form gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 2011 tax return form Internal Revenue Service 1201 N. 2011 tax return form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2011 tax return form   If you have a tax question, check the information available on IRS. 2011 tax return form gov or call 1-800-829-1040. 2011 tax return form We cannot answer tax questions sent to either of the above addresses. 2011 tax return form Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-10 Dependent Care Provider's Identification and Certification See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. 2011 tax return form Prev  Up  Next   Home   More Online Publications
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Understanding your CP259B Notice

Your organization didn’t file a Form 990-PF.


What you need to do

  • File a Form 990-PF
  • Complete the response page
  • Mail it to the address on the notice

    Answers to Common Questions

    What should I do if I have all ready filed Form 990-PF?
    If you filed within the last four weeks using the same name and Employer ID number (EIN) on your notice, you don’t have to do anything. Our system may not have processed your return at the time we mailed the notice.
    If you filed more than four weeks ago or used a different name or EIN, complete the Response form starting on Page 3, and mail it to us with a signed and dated copy of the return.

    What should I do if I don’t think I have to file a Form 990-PF?
    Complete the response form starting on Page 3 of the notice and mail it to us.


    Understanding your notice

    Reading your notice
    Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

    Notice CP259B, Page 1

    Notice CP259B, Page 2

    Notice CP259B, Page 3

    Notice CP259B, Page 4

Page Last Reviewed or Updated: 15-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The 2011 Tax Return Form

2011 tax return form 7. 2011 tax return form   Coverdell Education Savings Account (ESA) Table of Contents Introduction What Is a Coverdell ESAQualified Education Expenses ContributionsContribution Limits Additional Tax on Excess Contributions Rollovers and Other TransfersRollovers Changing the Designated Beneficiary Transfer Because of Divorce DistributionsTax-Free Distributions Taxable Distributions When Assets Must Be Distributed Introduction If your modified adjusted gross income (MAGI) is less than $110,000 ($220,000 if filing a joint return), you may be able to establish a Coverdell ESA to finance the qualified education expenses of a designated beneficiary. 2011 tax return form For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return. 2011 tax return form There is no limit on the number of separate Coverdell ESAs that can be established for a designated beneficiary. 2011 tax return form However, total contributions for the beneficiary in any year cannot be more than $2,000, no matter how many accounts have been established. 2011 tax return form See Contributions , later. 2011 tax return form This benefit applies not only to higher education expenses, but also to elementary and secondary education expenses. 2011 tax return form What is the tax benefit of the Coverdell ESA. 2011 tax return form   Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. 2011 tax return form   If, for a year, distributions from an account are not more than a designated beneficiary's qualified education expenses at an eligible educational institution, the beneficiary will not owe tax on the distributions. 2011 tax return form See Tax-Free Distributions , later. 2011 tax return form    Table 7-1 summarizes the main features of the Coverdell ESA. 2011 tax return form Table 7-1. 2011 tax return form Coverdell ESA at a Glance Do not rely on this table alone. 2011 tax return form It provides only general highlights. 2011 tax return form See the text for definitions of terms in bold type and for more complete explanations. 2011 tax return form Question Answer What is a Coverdell ESA? A savings account that is set up to pay the qualified education expenses of a designated beneficiary. 2011 tax return form Where can it be established? It can be opened in the United States at any bank or other IRS-approved entity that offers Coverdell ESAs. 2011 tax return form Who can have a Coverdell ESA? Any beneficiary who is under age 18 or is a special needs beneficiary. 2011 tax return form Who can contribute to a Coverdell ESA? Generally, any individual (including the beneficiary) whose modified adjusted gross income for the year is less than $110,000 ($220,000 in the case of a joint return). 2011 tax return form Are distributions tax free? Yes, if the distributions are not more than the beneficiary's adjusted qualified education expenses for the year. 2011 tax return form What Is a Coverdell ESA A Coverdell ESA is a trust or custodial account created or organized in the United States only for the purpose of paying the qualified education expenses of the Designated beneficiary (defined later) of the account. 2011 tax return form When the account is established, the designated beneficiary must be under age 18 or a special needs beneficiary. 2011 tax return form To be treated as a Coverdell ESA, the account must be designated as a Coverdell ESA when it is created. 2011 tax return form The document creating and governing the account must be in writing and must satisfy the following requirements. 2011 tax return form The trustee or custodian must be a bank or an entity approved by the IRS. 2011 tax return form The document must provide that the trustee or custodian can only accept a contribution that meets all of the following conditions. 2011 tax return form The contribution is in cash. 2011 tax return form The contribution is made before the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. 2011 tax return form The contribution would not result in total contributions for the year (not including rollover contributions) being more than $2,000. 2011 tax return form Money in the account cannot be invested in life insurance contracts. 2011 tax return form Money in the account cannot be combined with other property except in a common trust fund or common investment fund. 2011 tax return form The balance in the account generally must be distributed within 30 days after the earlier of the following events. 2011 tax return form The beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary. 2011 tax return form The beneficiary's death. 2011 tax return form Qualified Education Expenses Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. 2011 tax return form For purposes of Coverdell ESAs, the expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses. 2011 tax return form Designated beneficiary. 2011 tax return form   This is the individual named in the document creating the trust or custodial account to receive the benefit of the funds in the account. 2011 tax return form Contributions to a qualified tuition program (QTP). 2011 tax return form   A contribution to a QTP is a qualified education expense if the contribution is on behalf of the designated beneficiary of the Coverdell ESA. 2011 tax return form In the case of a change in beneficiary, this is a qualified expense only if the new beneficiary is a family member of that designated beneficiary. 2011 tax return form See chapter 8, Qualified Tuition Program . 2011 tax return form Eligible Educational Institution For purposes of Coverdell ESAs, an eligible educational institution can be either an eligible postsecondary school or an eligible elementary or secondary school. 2011 tax return form Eligible postsecondary school. 2011 tax return form   This is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 2011 tax return form S. 2011 tax return form Department of Education. 2011 tax return form It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2011 tax return form The educational institution should be able to tell you if it is an eligible educational institution. 2011 tax return form   Certain educational institutions located outside the United States also participate in the U. 2011 tax return form S. 2011 tax return form Department of Education's Federal Student Aid (FSA) programs. 2011 tax return form Eligible elementary or secondary school. 2011 tax return form   This is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law. 2011 tax return form Qualified Higher Education Expenses These are expenses related to enrollment or attendance at an eligible postsecondary school. 2011 tax return form As shown in the following list, to be qualified, some of the expenses must be required by the school and some must be incurred by students who are enrolled at least half-time. 2011 tax return form The following expenses must be required for enrollment or attendance of a designated beneficiary at an eligible postsecondary school. 2011 tax return form Tuition and fees. 2011 tax return form Books, supplies, and equipment. 2011 tax return form Expenses for special needs services needed by a special needs beneficiary must be incurred in connection with enrollment or attendance at an eligible postsecondary school. 2011 tax return form Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). 2011 tax return form The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. 2011 tax return form The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. 2011 tax return form The actual amount charged if the student is residing in housing owned or operated by the school. 2011 tax return form Half-time student. 2011 tax return form   A student is enrolled “at least half-time” if he or she is enrolled for at least half the full-time academic work load for the course of study the student is pursuing, as determined under the standards of the school where the student is enrolled. 2011 tax return form Qualified Elementary and Secondary Education Expenses These are expenses related to enrollment or attendance at an eligible elementary or secondary school. 2011 tax return form As shown in the following list, to be qualified, some of the expenses must be required or provided by the school. 2011 tax return form There are special rules for computer-related expenses. 2011 tax return form The following expenses must be incurred by a designated beneficiary in connection with enrollment or attendance at an eligible elementary or secondary school. 2011 tax return form Tuition and fees. 2011 tax return form Books, supplies, and equipment. 2011 tax return form Academic tutoring. 2011 tax return form Special needs services for a special needs beneficiary. 2011 tax return form The following expenses must be required or provided by an eligible elementary or secondary school in connection with attendance or enrollment at the school. 2011 tax return form Room and board. 2011 tax return form Uniforms. 2011 tax return form Transportation. 2011 tax return form Supplementary items and services (including extended day programs). 2011 tax return form The purchase of computer technology, equipment, or Internet access and related services is a qualified elementary and secondary education expense if it is to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is in elementary or secondary school. 2011 tax return form (This does not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. 2011 tax return form ) Contributions Any individual (including the designated beneficiary) can contribute to a Coverdell ESA if the individual's MAGI (defined later under Contribution Limits ) for the year is less than $110,000. 2011 tax return form For individuals filing joint returns, that amount is $220,000. 2011 tax return form Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. 2011 tax return form There is no requirement that an organization's income be below a certain level. 2011 tax return form Contributions must meet all of the following requirements. 2011 tax return form They must be in cash. 2011 tax return form They cannot be made after the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. 2011 tax return form They must be made by the due date of the contributor's tax return (not including extensions). 2011 tax return form Contributions can be made to one or several Coverdell ESAs for the same designated beneficiary provided that the total contributions are not more than the contribution limits (defined later) for a year. 2011 tax return form Contributions can be made, without penalty, to both a Coverdell ESA and a QTP in the same year for the same beneficiary. 2011 tax return form Table 7-2 summarizes many of the features of contributing to a Coverdell ESA. 2011 tax return form When contributions considered made. 2011 tax return form   Contributions made to a Coverdell ESA for the preceding tax year are considered to have been made on the last day of the preceding year. 2011 tax return form They must be made by the due date (not including extensions) for filing your return for the preceding year. 2011 tax return form   For example, if you make a contribution to a Coverdell ESA in February 2014, and you designate it as a contribution for 2013, you are considered to have made that contribution on December 31, 2013. 2011 tax return form Contribution Limits There are two yearly limits: One on the total amount that can be contributed for each designated beneficiary in any year, and One on the amount that any individual can contribute for any one designated beneficiary for a year. 2011 tax return form Limit for each designated beneficiary. 2011 tax return form   For 2013, the total of all contributions to all Coverdell ESAs set up for the benefit of any one designated beneficiary cannot be more than $2,000. 2011 tax return form This includes contributions (other than rollovers) to all the beneficiary's Coverdell ESAs from all sources. 2011 tax return form Rollovers are discussed under Rollovers and Other Transfers , later. 2011 tax return form Example. 2011 tax return form When Maria Luna was born in 2012, three separate Coverdell ESAs were set up for her, one by her parents, one by her grandfather, and one by her aunt. 2011 tax return form In 2013, the total of all contributions to Maria's three Coverdell ESAs cannot be more than $2,000. 2011 tax return form For example, if her grandfather contributed $2,000 to one of her Coverdell ESAs, no one else could contribute to any of her three accounts. 2011 tax return form Or, if her parents contributed $1,000 and her aunt $600, her grandfather or someone else could contribute no more than $400. 2011 tax return form These contributions could be put into any of Maria's Coverdell ESA accounts. 2011 tax return form Limit for each contributor. 2011 tax return form   Generally, you can contribute up to $2,000 for each designated beneficiary for 2013. 2011 tax return form This is the most you can contribute for the benefit of any one beneficiary for the year, regardless of the number of Coverdell ESAs set up for the beneficiary. 2011 tax return form Example. 2011 tax return form The facts are the same as in the previous example except that Maria Luna's older brother, Edgar, also has a Coverdell ESA. 2011 tax return form If their grandfather contributed $2,000 to Maria's Coverdell ESA in 2013, he could also contribute $2,000 to Edgar's Coverdell ESA. 2011 tax return form Reduced limit. 2011 tax return form   Your contribution limit may be reduced. 2011 tax return form If your MAGI (defined on this page) is between $95,000 and $110,000 (between $190,000 and $220,000 if filing a joint return), the $2,000 limit for each designated beneficiary is gradually reduced (see Figuring the limit , later). 2011 tax return form If your MAGI is $110,000 or more ($220,000 or more if filing a joint return), you cannot contribute to anyone's Coverdell ESA. 2011 tax return form Table 7-2. 2011 tax return form Coverdell ESA Contributions at a Glance Do not rely on this table alone. 2011 tax return form It provides only general highlights. 2011 tax return form See the text for more complete explanations. 2011 tax return form Question Answer Are contributions deductible? No. 2011 tax return form What is the annual contribution limit per designated beneficiary? $2,000 for each designated beneficiary. 2011 tax return form What if more than one Coverdell ESA has been opened for the same designated beneficiary? The annual contribution limit is $2,000 for each beneficiary, no matter how many Coverdell ESAs are set up for that beneficiary. 2011 tax return form What if more than one individual makes contributions for the same designated beneficiary? The annual contribution limit is $2,000 per beneficiary, no matter how many individuals contribute. 2011 tax return form Can contributions other than cash be made to a Coverdell ESA? No. 2011 tax return form When must contributions stop? No contributions can be made to a beneficiary's Coverdell ESA after he or she reaches age 18, unless the beneficiary is a special needs beneficiary. 2011 tax return form Modified adjusted gross income (MAGI). 2011 tax return form   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. 2011 tax return form MAGI when using Form 1040A. 2011 tax return form   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. 2011 tax return form MAGI when using Form 1040. 2011 tax return form   If you file Form 1040, your MAGI is the AGI on line 38 of that form, modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. 2011 tax return form MAGI when using Form 1040NR. 2011 tax return form   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form. 2011 tax return form MAGI when using Form 1040NR-EZ. 2011 tax return form   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form. 2011 tax return form   If you have any of these adjustments, you can use Worksheet 7-1. 2011 tax return form MAGI for a Coverdell ESA , later, to figure your MAGI for Form 1040. 2011 tax return form Worksheet 7-1. 2011 tax return form MAGI for a Coverdell ESA 1. 2011 tax return form Enter your adjusted gross income  (Form 1040, line 38)   1. 2011 tax return form   2. 2011 tax return form Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. 2011 tax return form       3. 2011 tax return form Enter your foreign housing deduction (Form 2555, line 50)   3. 2011 tax return form         4. 2011 tax return form Enter the amount of income from Puerto Rico you are excluding   4. 2011 tax return form       5. 2011 tax return form Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. 2011 tax return form       6. 2011 tax return form Add lines 2, 3, 4, and 5   6. 2011 tax return form   7. 2011 tax return form Add lines 1 and 6. 2011 tax return form This is your  modified adjusted gross income   7. 2011 tax return form   Figuring the limit. 2011 tax return form    To figure the limit on the amount you can contribute for each designated beneficiary, multiply $2,000 by a fraction. 2011 tax return form The numerator (top number) is your MAGI minus $95,000 ($190,000 if filing a joint return). 2011 tax return form The denominator (bottom number) is $15,000 ($30,000 if filing a joint return). 2011 tax return form Subtract the result from $2,000. 2011 tax return form This is the amount you can contribute for each beneficiary. 2011 tax return form You can use Worksheet 7-2. 2011 tax return form Coverdell ESA Contribution Limit to figure the limit on contributions. 2011 tax return form    Worksheet 7-2. 2011 tax return form Coverdell ESA Contribution Limit 1. 2011 tax return form Maximum contribution   1. 2011 tax return form $2,000 2. 2011 tax return form Enter your modified adjusted gross income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. 2011 tax return form   3. 2011 tax return form Enter $190,000 if married filing jointly; $95,000 for all other filers   3. 2011 tax return form   4. 2011 tax return form Subtract line 3 from line 2. 2011 tax return form If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. 2011 tax return form   5. 2011 tax return form Enter $30,000 if married filing jointly; $15,000 for all other filers   5. 2011 tax return form     Note. 2011 tax return form If the amount on line 4 is greater than or equal to the amount on line 5, stop here. 2011 tax return form You are not allowed to contribute to a Coverdell ESA for 2013. 2011 tax return form       6. 2011 tax return form Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. 2011 tax return form . 2011 tax return form 7. 2011 tax return form Multiply line 1 by line 6   7. 2011 tax return form   8. 2011 tax return form Subtract line 7 from line 1   8. 2011 tax return form   Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. 2011 tax return form Example. 2011 tax return form Paul, who is single, had a MAGI of $96,500 for 2013. 2011 tax return form Paul can contribute up to $1,800 in 2013 for each beneficiary, as shown in the illustrated Worksheet 7-2, Coverdell ESA Contribution Limit–Illustrated. 2011 tax return form Worksheet 7-2. 2011 tax return form Coverdell ESA Contribution Limit—Illustrated 1. 2011 tax return form Maximum contribution   1. 2011 tax return form $2,000 2. 2011 tax return form Enter your modified adjusted gross  income (MAGI) for purposes of figuring the contribution limit to a Coverdell ESA (see definition or Worksheet 7-1, earlier)   2. 2011 tax return form 96,500 3. 2011 tax return form Enter $190,000 if married filing jointly; $95,000 for all other filers   3. 2011 tax return form 95,000 4. 2011 tax return form Subtract line 3 from line 2. 2011 tax return form If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. 2011 tax return form 1,500 5. 2011 tax return form Enter $30,000 if married filing jointly; $15,000 for all other filers   5. 2011 tax return form 15,000   Note. 2011 tax return form If the amount on line 4 is greater than or equal to the amount on line 5,  stop here. 2011 tax return form You are not allowed to  contribute to a Coverdell ESA for 2013. 2011 tax return form       6. 2011 tax return form Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. 2011 tax return form . 2011 tax return form 100 7. 2011 tax return form Multiply line 1 by line 6   7. 2011 tax return form 200 8. 2011 tax return form Subtract line 7 from line 1   8. 2011 tax return form 1,800 Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. 2011 tax return form Additional Tax on Excess Contributions The beneficiary must pay a 6% excise tax each year on excess contributions that are in a Coverdell ESA at the end of the year. 2011 tax return form Excess contributions are the total of the following two amounts. 2011 tax return form Contributions to any designated beneficiary's Coverdell ESA for the year that are more than $2,000 (or, if less, the total of each contributor's limit for the year, as discussed earlier). 2011 tax return form Excess contributions for the preceding year, reduced by the total of the following two amounts: Distributions (other than those rolled over as discussed later) during the year, and The contribution limit for the current year minus the amount contributed for the current year. 2011 tax return form Exceptions. 2011 tax return form   The excise tax does not apply if excess contributions made during 2013 (and any earnings on them) are distributed before the first day of the sixth month of the following tax year (June 1, 2014, for a calendar year taxpayer). 2011 tax return form   However, you must include the distributed earnings in gross income for the year in which the excess contribution was made. 2011 tax return form You should receive Form 1099-Q, Payments From Qualified Education Programs, from each institution from which excess contributions were distributed. 2011 tax return form Box 2 of that form will show the amount of earnings on your excess contributions. 2011 tax return form Code “2” or “3” entered in the blank box below boxes 5 and 6 indicate the year in which the earnings are taxable. 2011 tax return form See Instructions for Recipient on the back of copy B of your Form 1099-Q. 2011 tax return form Enter the amount of earnings on line 21 of Form 1040 (or Form 1040NR) for the applicable tax year. 2011 tax return form For more information, see Taxable Distributions , later. 2011 tax return form   The excise tax does not apply to any rollover contribution. 2011 tax return form Note. 2011 tax return form Contributions made in one year for the preceding tax year are considered to have been made on the last day of the preceding year. 2011 tax return form Example. 2011 tax return form In 2012, Greta's parents and grandparents contributed a total of $2,300 to Greta's Coverdell ESA— an excess contribution of $300. 2011 tax return form Because Greta did not withdraw the excess before June 1, 2013, she had to pay an additional tax of $18 (6% × $300) when she filed her 2012 tax return. 2011 tax return form In 2013, excess contributions of $500 were made to Greta's account, however, she withdrew $250 from that account to use for qualified education expenses. 2011 tax return form Using the steps shown earlier under Additional Tax on Excess Contributions , Greta figures the excess contribution in her account at the end of 2013 as follows. 2011 tax return form (1)   $500 excess contributions made in 2013     + (2)   $300 excess contributions in ESA at end of 2012     − (2a)   $250 distribution during 2013         $550 excess at end of 2013   × 6%=$33           If Greta limits 2014 contributions to $1,450 ($2,000 maximum allowed − $550 excess contributions from 2013), she will not owe any additional tax in 2014 for excess contributions. 2011 tax return form Figuring and reporting the additional tax. 2011 tax return form   You figure this excise tax in Part V of Form 5329. 2011 tax return form Report the additional tax on Form 1040, line 58 (or Form 1040NR, line 56). 2011 tax return form Rollovers and Other Transfers Assets can be rolled over from one Coverdell ESA to another or the designated beneficiary can be changed. 2011 tax return form The beneficiary's interest can be transferred to a spouse or former spouse because of divorce. 2011 tax return form Rollovers Any amount distributed from a Coverdell ESA is not taxable if it is rolled over to another Coverdell ESA for the benefit of the same beneficiary or a member of the beneficiary's family (including the beneficiary's spouse) who is under age 30. 2011 tax return form This age limitation does not apply if the new beneficiary is a special needs beneficiary. 2011 tax return form An amount is rolled over if it is paid to another Coverdell ESA within 60 days after the date of the distribution. 2011 tax return form Do not report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. 2011 tax return form These are not taxable distributions. 2011 tax return form Members of the beneficiary's family. 2011 tax return form   For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary. 2011 tax return form Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. 2011 tax return form Brother, sister, stepbrother, or stepsister. 2011 tax return form Father or mother or ancestor of either. 2011 tax return form Stepfather or stepmother. 2011 tax return form Son or daughter of a brother or sister. 2011 tax return form Brother or sister of father or mother. 2011 tax return form Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. 2011 tax return form The spouse of any individual listed above. 2011 tax return form First cousin. 2011 tax return form Example. 2011 tax return form When Aaron graduated from college last year he had $5,000 left in his Coverdell ESA. 2011 tax return form He wanted to give this money to his younger sister, who was still in high school. 2011 tax return form In order to avoid paying tax on the distribution of the amount remaining in his account, Aaron contributed the same amount to his sister's Coverdell ESA within 60 days of the distribution. 2011 tax return form Only one rollover per Coverdell ESA is allowed during the 12-month period ending on the date of the payment or distribution. 2011 tax return form This rule does not apply to the rollover of a military death gratuity or payment from Servicemembers' Group Life Insurance (SGLI). 2011 tax return form Military death gratuity. 2011 tax return form   If you received a military death gratuity or a payment from Servicemembers' Group Life Insurance (SGLI), you may roll over all or part of the amount received to one or more Coverdell ESAs for the benefit of members of the beneficiary's family (see Members of the beneficiary's family , earlier). 2011 tax return form Such payments are made to an eligible survivor upon the death of a member of the armed forces. 2011 tax return form The contribution to a Coverdell ESA from survivor benefits received cannot be made later than 1 year after the date on which you receive the gratuity or SGLI payment. 2011 tax return form   This rollover contribution is not subject to (but is in addition to) the contribution limits discussed earlier under Contribution Limits . 2011 tax return form The amount you roll over cannot exceed the total survivor benefits you received, reduced by contributions from these benefits to a Roth IRA or other Coverdell ESAs. 2011 tax return form   The amount contributed from the survivor benefits is treated as part of your basis (cost) in the Coverdell ESA, and will not be taxed when distributed. 2011 tax return form See Distributions , later. 2011 tax return form The limit of one rollover per Coverdell ESA during a 12-month period does not apply to a military death gratuity or SGLI payment. 2011 tax return form Changing the Designated Beneficiary The designated beneficiary can be changed. 2011 tax return form See Members of the beneficiary's family , earlier. 2011 tax return form There are no tax consequences if, at the time of the change, the new beneficiary is under age 30 or is a special needs beneficiary. 2011 tax return form Example. 2011 tax return form Assume the same situation for Aaron as in the last example (see Rollovers , earlier). 2011 tax return form Instead of closing his Coverdell ESA and paying the distribution into his sister's Coverdell ESA, Aaron could have instructed the trustee of his account to simply change the name of the beneficiary on his account to that of his sister. 2011 tax return form Transfer Because of Divorce If a spouse or former spouse receives a Coverdell ESA under a divorce or separation instrument, it is not a taxable transfer. 2011 tax return form After the transfer, the spouse or former spouse treats the Coverdell ESA as his or her own. 2011 tax return form Example. 2011 tax return form In their divorce settlement, Peg received her ex-husband's Coverdell ESA. 2011 tax return form In this process, the account was transferred into her name. 2011 tax return form Peg now treats the funds in this Coverdell ESA as if she were the original owner. 2011 tax return form Distributions The designated beneficiary of a Coverdell ESA can take a distribution at any time. 2011 tax return form Whether the distributions are tax free depends, in part, on whether the distributions are equal to or less than the amount of Adjusted qualified education expenses (defined later) that the beneficiary has in the same tax year. 2011 tax return form See Table 7-3, Coverdell ESA Distributions at a Glance, for highlights. 2011 tax return form Table 7-3. 2011 tax return form Coverdell ESA Distributions at a Glance Do not rely on this table alone. 2011 tax return form It provides only general highlights. 2011 tax return form See the text for definitions of terms in bold type and for more complete explanations. 2011 tax return form Question Answer Is a distribution from a Coverdell ESA to pay for a designated beneficiary's qualified education expenses tax free? Generally, yes, to the extent the amount of the distribution is not more than the designated beneficiary's adjusted qualified education expenses. 2011 tax return form After the designated beneficiary completes his or her education at an eligible educational institution, can amounts remaining in the Coverdell ESA be distributed? Yes. 2011 tax return form Amounts must be distributed when the designated beneficiary reaches age 30, unless he or she is a special needs beneficiary. 2011 tax return form Also, certain transfers to members of the beneficiary's family are permitted. 2011 tax return form Does the designated beneficiary need to be enrolled for a minimum number of courses to take a tax-free distribution? No. 2011 tax return form Adjusted qualified education expenses. 2011 tax return form   To determine if total distributions for the year are more than the amount of qualified education expenses, reduce total qualified education expenses by any tax-free educational assistance. 2011 tax return form Tax-free educational assistance includes: The tax-free part of scholarships and fellowships (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Pell grants (see Pell Grants and Other Title IV Need-Based Education Grants in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2011 tax return form The amount you get by subtracting tax-free educational assistance from your total qualified education expenses is your adjusted qualified education expenses. 2011 tax return form Tax-Free Distributions Generally, distributions are tax free if they are not more than the beneficiary's adjusted qualified education expenses for the year. 2011 tax return form Do not report tax-free distributions (including qualifying rollovers) on your tax return. 2011 tax return form Taxable Distributions A portion of the distributions is generally taxable to the beneficiary if the total distributions are more than the beneficiary's adjusted qualified education expenses for the year. 2011 tax return form Excess distribution. 2011 tax return form   This is the part of the total distribution that is more than the beneficiary's adjusted qualified education expenses for the year. 2011 tax return form Earnings and basis. 2011 tax return form   You will receive a Form 1099-Q for each of the Coverdell ESAs from which money was distributed in 2013. 2011 tax return form The amount of your gross distribution will be shown in box 1. 2011 tax return form For 2013, instead of dividing the gross distribution between your earnings (box 2) and your basis (already-taxed amount) (box 3), the payer or trustee may report the fair market value (account balance) of the Coverdell ESA as of December 31, 2013. 2011 tax return form This will be shown in the blank box below boxes 5 and 6. 2011 tax return form   The amount contributed from survivor benefits (see Military death gratuity , earlier) is treated as part of your basis and will not be taxed when distributed. 2011 tax return form Figuring the Taxable Portion of a Distribution The taxable portion is the amount of the excess distribution that represents earnings that have accumulated tax free in the account. 2011 tax return form Figure the taxable portion for 2013 as shown in the following steps. 2011 tax return form Multiply the total amount distributed by a fraction. 2011 tax return form The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the value (balance) of the account at the end of 2013 plus the amount distributed during 2013. 2011 tax return form Subtract the amount figured in (1) from the total amount distributed during 2013. 2011 tax return form The result is the amount of earnings included in the distribution(s). 2011 tax return form Multiply the amount of earnings figured in (2) by a fraction. 2011 tax return form The numerator is the adjusted qualified education expenses paid during 2013 and the denominator is the total amount distributed during 2013. 2011 tax return form Subtract the amount figured in (3) from the amount figured in (2). 2011 tax return form The result is the amount the beneficiary must include in income. 2011 tax return form The taxable amount must be reported on Form 1040 or Form 1040NR, line 21. 2011 tax return form Example. 2011 tax return form You received an $850 distribution from your Coverdell ESA, to which $1,500 had been contributed before 2013. 2011 tax return form There were no contributions in 2013. 2011 tax return form This is your first distribution from the account, so your basis in the account on December 31, 2012, was $1,500. 2011 tax return form The value (balance) of your account on December 31, 2013, was $950. 2011 tax return form You had $700 of adjusted qualified education expenses (AQEE) for the year. 2011 tax return form Using the steps in Figuring the Taxable Portion of a Distribution , earlier, figure the taxable portion of your distribution as follows. 2011 tax return form   1. 2011 tax return form $850 (distribution) × $1,500 basis + $0 contributions  $950 value + $850 distribution       =$708 (basis portion of distribution)     2. 2011 tax return form $850 (distribution)−$708 (basis portion of distribution)     =$142 (earnings included in distribution)   3. 2011 tax return form $142 (earnings) × $700 AQEE  $850 distribution           =$117 (tax-free earnings)     4. 2011 tax return form $142 (earnings)−$117 (tax-free earnings)=$25 (taxable earnings)                 You must include $25 in income as distributed earnings not used for qualified education expenses. 2011 tax return form Report this amount on Form 1040, line 21, listing the type and amount of income on the dotted line. 2011 tax return form Worksheet 7-3, Coverdell ESA–Taxable Distributions and Basis , at the end of this chapter, can help you figure your adjusted qualified education expenses, how much of your distribution must be included in income, and the remaining basis in your Coverdell ESA(s). 2011 tax return form Coordination With American Opportunity and Lifetime Learning Credits The American opportunity or lifetime learning credit can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits. 2011 tax return form This means the beneficiary must reduce qualified higher education expenses by tax-free educational assistance, and then further reduce them by any expenses taken into account in determining an American opportunity or lifetime learning credit. 2011 tax return form Example. 2011 tax return form Derek Green had $5,800 of qualified higher education expenses for 2013, his first year in college. 2011 tax return form He paid his college expenses from the following sources. 2011 tax return form     Partial tuition scholarship (tax free) $1,500     Coverdell ESA distribution 1,000     Gift from parents 2,100     Earnings from part-time job 1,200           Of his $5,800 of qualified higher education expenses, $4,000 was tuition and related expenses that also qualified for an American opportunity credit. 2011 tax return form Derek's parents claimed a $2,500 American opportunity credit (based on $4,000 expenses) on their tax return. 2011 tax return form Before Derek can determine the taxable portion of his Coverdell ESA distribution, he must reduce his total qualified higher education expenses. 2011 tax return form     Total qualified higher education expenses $5,800     Minus: Tax-free educational assistance −1,500     Minus: Expenses taken into account in  figuring American opportunity credit − 4,000     Equals: Adjusted qualified higher education  expenses (AQHEE) $ 300           Since the adjusted qualified higher education expenses ($300) are less than the Coverdell ESA distribution ($1,000), part of the distribution will be taxable. 2011 tax return form The balance in Derek's account was $1,800 on December 31, 2013. 2011 tax return form Prior to 2013, $2,100 had been contributed to this account. 2011 tax return form Contributions for 2013 totaled $400. 2011 tax return form Using the four steps outlined earlier, Derek figures the taxable portion of his distribution as shown below. 2011 tax return form   1. 2011 tax return form $1,000 (distribution) × $2,100 basis + $400 contributions  $1,800 value + $1,000 distribution           =$893 (basis portion of distribution)     2. 2011 tax return form $1,000 (distribution)−$893 (basis portion of distribution)     = $107 (earnings included in distribution)   3. 2011 tax return form $107 (earnings) × $300 AQHEE  $1,000 distribution       =$32 (tax-free earnings)     4. 2011 tax return form $107 (earnings)−$32 (tax-free earnings)=$75 (taxable earnings)                 Derek must include $75 in income (Form 1040, line 21). 2011 tax return form This is the amount of distributed earnings not used for adjusted qualified higher education expenses. 2011 tax return form Coordination With Qualified Tuition Program (QTP) Distributions If a designated beneficiary receives distributions from both a Coverdell ESA and a QTP in the same year, and the total distribution is more than the beneficiary's adjusted qualified higher education expenses, those expenses must be allocated between the distribution from the Coverdell ESA and the distribution from the QTP before figuring how much of each distribution is taxable. 2011 tax return form The following two examples illustrate possible allocations. 2011 tax return form Example 1. 2011 tax return form In 2013, Beatrice graduated from high school and began her first semester of college. 2011 tax return form That year, she had $1,000 of qualified elementary and secondary education expenses (QESEE) for high school and $3,000 of qualified higher education expenses (QHEE) for college. 2011 tax return form To pay these expenses, Beatrice withdrew $800 from her Coverdell ESA and $4,200 from her QTP. 2011 tax return form No one claimed Beatrice as a dependent, nor was she eligible for an education credit. 2011 tax return form She did not receive any tax-free educational assistance in 2013. 2011 tax return form Beatrice must allocate her total qualified education expenses between the two distributions. 2011 tax return form Beatrice knows that tax-free treatment will be available if she applies her $800 Coverdell ESA distribution toward her $1,000 of qualified education expenses for high school. 2011 tax return form The qualified expenses are greater than the distribution, making the $800 Coverdell ESA distribution tax free. 2011 tax return form Next, Beatrice matches her $4,200 QTP distribution to her $3,000 of QHEE, and finds she has an excess QTP distribution of $1,200 ($4,200 QTP − $3,000 QHEE). 2011 tax return form She cannot use the extra $200 of high school expenses (from (1) above) against the QTP distribution because those expenses do not qualify a QTP for tax-free treatment. 2011 tax return form Finally, Beatrice figures the taxable and tax-free portions of her QTP distribution based on her $3,000 of QHEE. 2011 tax return form (See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program for more information. 2011 tax return form ) Example 2. 2011 tax return form Assume the same facts as in Example 1 , except that Beatrice withdrew $1,800 from her Coverdell ESA and $3,200 from her QTP. 2011 tax return form In this case, she allocates her qualified education expenses as follows. 2011 tax return form Using the same reasoning as in Example 1, Beatrice matches $1,000 of her Coverdell ESA distribution to her $1,000 of QESEE—she has $800 of her distribution remaining. 2011 tax return form Because higher education expenses can also qualify a Coverdell ESA distribution for tax-free treatment, Beatrice allocates her $3,000 of QHEE between the remaining $800 Coverdell ESA and the $3,200 QTP distributions ($4,000 total). 2011 tax return form   $3,000 QHEE × $800 ESA distribution  $4,000 total distribution = $600 QHEE (ESA)     $3,000 QHEE × $3,200 QTP distribution  $4,000 total distribution = $2,400 QHEE (QTP)   Beatrice then figures the taxable part of her: Coverdell ESA distribution based on qualified education expenses of $1,600 ($1,000 QESEE + $600 QHEE). 2011 tax return form See Figuring the Taxable Portion of a Distribution , earlier, in this chapter. 2011 tax return form   QTP distribution based on her $2,400 of QHEE (see Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program). 2011 tax return form The above examples show two types of allocation between distributions from a Coverdell ESA and a QTP. 2011 tax return form However, you do not have to allocate your expenses in the same way. 2011 tax return form You can use any reasonable method. 2011 tax return form Losses on Coverdell ESA Investments If you have a loss on your investment in a Coverdell ESA, you may be able to deduct the loss on your income tax return. 2011 tax return form You can deduct the loss only when all amounts from that account have been distributed and the total distributions are less than your unrecovered basis. 2011 tax return form Your basis is the total amount of contributions to that Coverdell ESA. 2011 tax return form You claim the loss as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23 (Schedule A (Form 1040NR), line 9), subject to the 2%-of-adjusted-gross-income limit. 2011 tax return form If you have distributions from more than one Coverdell ESA account during a year, you must combine the information (amount of distribution, basis, etc. 2011 tax return form ) from all such accounts in order to determine your taxable earnings for the year. 2011 tax return form By doing this, the loss from one ESA account reduces the distributed earnings (if any) from any other ESA account. 2011 tax return form For examples of the calculation, see Losses on QTP Investments in chapter 8, Qualified Tuition Program. 2011 tax return form Additional Tax on Taxable Distributions Generally, if you receive a taxable distribution, you also must pay a 10% additional tax on the amount included in income. 2011 tax return form Exceptions. 2011 tax return form   The 10% additional tax does not apply to distributions: Paid to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary. 2011 tax return form Made because the designated beneficiary is disabled. 2011 tax return form A person is considered to be disabled if he or she shows proof that he or she cannot do any substantial gainful activity because of his or her physical or mental condition. 2011 tax return form A physician must determine that his or her condition can be expected to result in death or to be of long-continued and indefinite duration. 2011 tax return form Included in income because the designated beneficiary received: A tax-free scholarship or fellowship (see Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Veterans' educational assistance (see Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions), Employer-provided educational assistance (see chapter 11, Employer-Provided Educational Assistance ), or Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2011 tax return form Made on account of the attendance of the designated beneficiary at a U. 2011 tax return form S. 2011 tax return form military academy (such as the USMA at West Point). 2011 tax return form This exception applies only to the extent that the amount of the distribution does not exceed the costs of advanced education (as defined in section 2005(d)(3) of title 10 of the U. 2011 tax return form S. 2011 tax return form Code) attributable to such attendance. 2011 tax return form Included in income only because the qualified education expenses were taken into account in determining the American opportunity or lifetime learning credit (see Coordination With American Opportunity and Lifetime Learning Credits , earlier). 2011 tax return form Made before June 1, 2014, of an excess 2013 contribution (and any earnings on it). 2011 tax return form The distributed earnings must be included in gross income for the year in which the excess contribution was made. 2011 tax return form Exception (3) applies only to the extent the distribution is not more than the scholarship, allowance, or payment. 2011 tax return form Figuring the additional tax. 2011 tax return form    Use Part II of Form 5329, to figure any additional tax. 2011 tax return form Report the amount on Form 1040, line 58, or Form 1040NR, line 56. 2011 tax return form When Assets Must Be Distributed Any assets remaining in a Coverdell ESA must be distributed when either one of the following two events occurs. 2011 tax return form The designated beneficiary reaches age 30. 2011 tax return form In this case, the remaining assets must be distributed within 30 days after the beneficiary reaches age 30. 2011 tax return form However, this rule does not apply if the beneficiary is a special needs beneficiary. 2011 tax return form The designated beneficiary dies before reaching age 30. 2011 tax return form In this case, the remaining assets must generally be distributed within 30 days after the date of death. 2011 tax return form Exception for Transfer to Surviving Spouse or Family Member If a Coverdell ESA is transferred to a surviving spouse or other family member as the result of the death of the designated beneficiary, the Coverdell ESA retains its status. 2011 tax return form (“Family member” was defined earlier under Rollovers . 2011 tax return form ) This means the spouse or other family member can treat the Coverdell ESA as his or her own and does not need to withdraw the assets until he or she reaches age 30. 2011 tax return form This age limitation does not apply if the new beneficiary is a special needs beneficiary. 2011 tax return form There are no tax consequences as a result of the transfer. 2011 tax return form How To Figure the Taxable Earnings When a total distribution is made because the designated beneficiary either reached age 30 or died, the earnings that accumulated tax free in the account must be included in taxable income. 2011 tax return form You determine these earnings as shown in the following two steps. 2011 tax return form Multiply the amount distributed by a fraction. 2011 tax return form The numerator is the basis (contributions not previously distributed) at the end of 2012 plus total contributions for 2013 and the denominator is the balance in the account at the end of 2013 plus the amount distributed during 2013. 2011 tax return form Subtract the amount figured in (1) from the total amount distributed during 2013. 2011 tax return form The result is the amount of earnings included in the distribution. 2011 tax return form For an example, see steps (1) and (2) of the Example under Figuring the Taxable Portion of a Distribution, earlier. 2011 tax return form The beneficiary or other person receiving the distribution must report this amount on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line. 2011 tax return form Worksheet 7-3 Instructions. 2011 tax return form Coverdell ESA—Taxable Distributions and Basis Line G. 2011 tax return form Enter the total distributions received from all Coverdell ESAs during 2013. 2011 tax return form Do not include amounts rolled over to another ESA within 60 days (only one rollover is allowed during any 12-month period). 2011 tax return form Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year for which the contributions were made. 2011 tax return form Line 2. 2011 tax return form Your basis (amount already taxed) in this Coverdell ESA as of December 31, 2012, is the total of:   •All contributions to this Coverdell ESA before 2013 •Minus the tax-free portion of any distributions from this Coverdell ESA before 2013. 2011 tax return form   If your last distribution from this Coverdell ESA was before 2013, you must start with the basis in your account as of the end of the last year in which you took a distribution. 2011 tax return form For years before 2002, you can find that amount on the last line of the worksheet in the Instructions for Form 8606, Nondeductible IRAs, that you completed for that year. 2011 tax return form For years after 2001, you can find that amount by using the ending basis from the worksheet in Publication 970 for that year. 2011 tax return form You can determine your basis in this Coverdell ESA as of December 31, 2012, by adding to the basis as of the end of that year any contributions made to that account after the year of the distribution and before 2013. 2011 tax return form Line 4. 2011 tax return form Enter the total distributions received from this Coverdell ESA in 2013. 2011 tax return form Do not include amounts rolled over to another Coverdell ESA within 60 days (only one rollover is allowed during any 12-month period). 2011 tax return form   Also, do not include excess contributions that were distributed with the related earnings (or less any loss) before the first day of the sixth month of the tax year following the year of the contributions. 2011 tax return form Line 7. 2011 tax return form Enter the total value of this Coverdell ESA as of December 31, 2013, plus any outstanding rollovers contributed to the account after 2012, but before the end of the 60-day rollover period. 2011 tax return form A statement should be sent to you by January 31, 2014, for this Coverdell ESA showing the value on December 31, 2013. 2011 tax return form   A rollover is a tax-free withdrawal from one Coverdell ESA that is contributed to another Coverdell ESA. 2011 tax return form An outstanding rollover is any amount withdrawn within 60 days before the end of 2013 (November 2 through December 31) that was rolled over after December 31, 2013, but within the 60-day rollover period. 2011 tax return form Worksheet 7-3. 2011 tax return form Coverdell ESA—Taxable Distributions and Basis How to complete this worksheet. 2011 tax return form • • • Complete Part I, lines A through H, on only one worksheet. 2011 tax return form  Complete a separate Part II, lines 1 through 15, for each of your Coverdell ESAs. 2011 tax return form  Complete Part III, the Summary (line 16), on only one worksheet. 2011 tax return form Part I. 2011 tax return form Qualified Education Expenses (Complete for total expenses)       A. 2011 tax return form Enter your total qualified education expenses for 2013   A. 2011 tax return form   B. 2011 tax return form Enter those qualified education expenses paid for with tax-free educational assistance (for example, tax-free scholarships, veterans' educational benefits, Pell grants, employer-provided educational assistance)   B. 2011 tax return form         C. 2011 tax return form Enter those qualified higher education expenses deducted on Schedule C or C-EZ (Form 1040). 2011 tax return form Schedule F (Form 1040), or as a miscellaneous itemized deduction on Schedule A (Form 1040 or 1040NR)   C. 2011 tax return form         D. 2011 tax return form Enter those qualified higher education expenses on which  an American opportunity or lifetime learning credit was based   D. 2011 tax return form         E. 2011 tax return form Add lines B, C, and D   D. 2011 tax return form   F. 2011 tax return form Subtract line E from line A. 2011 tax return form This is your adjusted qualified education expense for 2013   E. 2011 tax return form   G. 2011 tax return form Enter your total distributions from all Coverdell ESAs during 2013. 2011 tax return form Do not include rollovers  or the return of excess contributions (see instructions)   F. 2011 tax return form   H. 2011 tax return form Divide line F by line G. 2011 tax return form Enter the result as a decimal (rounded to at least 3 places). 2011 tax return form If the  result is 1. 2011 tax return form 000 or more, enter 1. 2011 tax return form 000   G. 2011 tax return form . 2011 tax return form Part II. 2011 tax return form Taxable Distributions and Basis (Complete separately for each account) 1. 2011 tax return form Enter the amount contributed to this Coverdell ESA for 2013, including contributions made for 2013 from January 1, 2014, through April 15, 2014. 2011 tax return form Do not include rollovers or the return of excess contributions   1. 2011 tax return form   2. 2011 tax return form Enter your basis in this Coverdell ESA as of December 31, 2012 (see instructions)   2. 2011 tax return form   3. 2011 tax return form Add lines 1 and 2   3. 2011 tax return form   4. 2011 tax return form Enter the total distributions from this Coverdell ESA during 2013. 2011 tax return form Do not include rollovers  or the return of excess contributions (see instructions)   4. 2011 tax return form   5. 2011 tax return form Multiply line 4 by line H. 2011 tax return form This is the amount of adjusted qualified  education expense attributable to this Coverdell ESA   5. 2011 tax return form         6. 2011 tax return form Subtract line 5 from line 4   6. 2011 tax return form         7. 2011 tax return form Enter the total value of this Coverdell ESA as of December 31, 2013,  plus any outstanding rollovers (see instructions)   7. 2011 tax return form         8. 2011 tax return form Add lines 4 and 7   8. 2011 tax return form         9. 2011 tax return form Divide line 3 by line 8. 2011 tax return form Enter the result as a decimal (rounded to  at least 3 places). 2011 tax return form If the result is 1. 2011 tax return form 000 or more, enter 1. 2011 tax return form 000   9. 2011 tax return form . 2011 tax return form       10. 2011 tax return form Multiply line 4 by line 9. 2011 tax return form This is the amount of basis allocated to your  distributions, and is tax free   10. 2011 tax return form     Note. 2011 tax return form If line 6 is zero, skip lines 11 through 13, enter -0- on line 14, and go to line 15. 2011 tax return form       11. 2011 tax return form Subtract line 10 from line 4   11. 2011 tax return form   12. 2011 tax return form Divide line 5 by line 4. 2011 tax return form Enter the result as a decimal (rounded to  at least 3 places). 2011 tax return form If the result is 1. 2011 tax return form 000 or more, enter 1. 2011 tax return form 000   12. 2011 tax return form . 2011 tax return form       13. 2011 tax return form Multiply line 11 by line 12. 2011 tax return form This is the amount of qualified education  expenses allocated to your distributions, and is tax free   13. 2011 tax return form   14. 2011 tax return form Subtract line 13 from line 11. 2011 tax return form This is the portion of the distributions from this  Coverdell ESA in 2013 that you must include in income   14. 2011 tax return form   15. 2011 tax return form Subtract line 10 from line 3. 2011 tax return form This is your basis in this Coverdell ESA as of December 31, 2013   15. 2011 tax return form   Part III. 2011 tax return form Summary (Complete only once)       16. 2011 tax return form Taxable amount. 2011 tax return form Add together all amounts on line 14 for all your Coverdell ESAs. 2011 tax return form Enter here  and include on Form 1040, line 21, or Form 1040NR, line 21, listing the type and amount of income on the dotted line   16. 2011 tax return form   Prev  Up  Next   Home   More Online Publications