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Amended Tax Return For 2010

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Amended Tax Return For 2010

Amended tax return for 2010 Index A Assistance (see Tax help) C Cancellation of indebtedness, Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding Casualty and theft losses, Casualty and Theft Losses Charitable contributions, Temporary Suspension of Limits on Charitable Contributions Child tax credit, Earned Income Credit and Child Tax Credit Clean-up costs, Demolition and Clean-up Costs Copy of tax return, request for, Request for copy of tax return. Amended tax return for 2010 Credits: Child tax, Earned Income Credit and Child Tax Credit Earned income, Earned Income Credit and Child Tax Credit Education, Education Credits Employee retention, Employee Retention Credit Employer housing, Employer Housing Credit and Exclusion Rehabilitation tax, Increase in Rehabilitation Tax Credit D Demolition costs, Demolition and Clean-up Costs Distributions: Home purchase or construction, Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Qualified disaster recovery assistance, Qualified disaster recovery assistance distribution. Amended tax return for 2010 Repayment of, Repayment of Qualified Disaster Recovery Assistance Distributions Taxation of, Taxation of Qualified Disaster Recovery Assistance Distributions E Earned income credit, Earned Income Credit and Child Tax Credit Education credits, Education Credits Eligible retirement plan, Eligible retirement plan. Amended tax return for 2010 Employee retention credit, Employee Retention Credit Employer housing credit, Employer Housing Credit and Exclusion Exemption, additional for housing, Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding F Federal mortgage subsidy, recapture of, Recapture of Federal Mortgage Subsidy Free tax services, How To Get Tax Help H Help (see Tax help) Hope credit (see Education credits) I Involuntary conversion (see Replacement period for nonrecognition of gain) IRAs and other retirement plans, IRAs and Other Retirement Plans L Lifetime learning credit (see Education credits) M Mileage reimbursements, charitable volunteers, Mileage Reimbursements to Charitable Volunteers More information (see Tax help) N Net operating losses, Net Operating Losses P Publications (see Tax help) Q Qualified disaster recovery assistance distribution, Qualified disaster recovery assistance distribution. Amended tax return for 2010 Qualified disaster recovery assistance loss, Qualified disaster recovery assistance loss. Amended tax return for 2010 R Rehabilitation tax credit, Increase in Rehabilitation Tax Credit Relocation, temporary, Tax Relief for Temporary Relocation Replacement period for nonrecognition of gain, Replacement Period for Nonrecognition of Gain Retirement plan, eligible, Eligible retirement plan. Amended tax return for 2010 Retirement plans, IRAs and Other Retirement Plans S Standard mileage rate, charitable use, Standard Mileage Rate for Charitable Use of Vehicles T Tax help, How To Get Tax Help Tax return: Request for copy, Request for copy of tax return. Amended tax return for 2010 Request for transcript, Request for transcript of tax return. Amended tax return for 2010 Taxpayer Advocate, Contacting your Taxpayer Advocate. Amended tax return for 2010 Temporary relocation, Tax Relief for Temporary Relocation Theft losses, Casualty and Theft Losses Transcript of tax return, request for, Request for transcript of tax return. Amended tax return for 2010 TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications
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The Amended Tax Return For 2010

Amended tax return for 2010 7. Amended tax return for 2010   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. Amended tax return for 2010 For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return. Amended tax return for 2010 There is no limit on the number of separate Coverdell ESAs that can be established for a designated beneficiary. Amended tax return for 2010 However, total contributions for the beneficiary in any year cannot be more than $2,000, no matter how many accounts have been established. Amended tax return for 2010 See Contributions , later. Amended tax return for 2010 This benefit applies not only to higher education expenses, but also to elementary and secondary education expenses. Amended tax return for 2010 What is the tax benefit of the Coverdell ESA. Amended tax return for 2010   Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. Amended tax return for 2010   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. Amended tax return for 2010 See Tax-Free Distributions , later. Amended tax return for 2010    Table 7-1 summarizes the main features of the Coverdell ESA. Amended tax return for 2010 Table 7-1. Amended tax return for 2010 Coverdell ESA at a Glance Do not rely on this table alone. Amended tax return for 2010 It provides only general highlights. Amended tax return for 2010 See the text for definitions of terms in bold type and for more complete explanations. Amended tax return for 2010 Question Answer What is a Coverdell ESA? A savings account that is set up to pay the qualified education expenses of a designated beneficiary. Amended tax return for 2010 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. Amended tax return for 2010 Who can have a Coverdell ESA? Any beneficiary who is under age 18 or is a special needs beneficiary. Amended tax return for 2010 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). Amended tax return for 2010 Are distributions tax free? Yes, if the distributions are not more than the beneficiary's adjusted qualified education expenses for the year. Amended tax return for 2010 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. Amended tax return for 2010 When the account is established, the designated beneficiary must be under age 18 or a special needs beneficiary. Amended tax return for 2010 To be treated as a Coverdell ESA, the account must be designated as a Coverdell ESA when it is created. Amended tax return for 2010 The document creating and governing the account must be in writing and must satisfy the following requirements. Amended tax return for 2010 The trustee or custodian must be a bank or an entity approved by the IRS. Amended tax return for 2010 The document must provide that the trustee or custodian can only accept a contribution that meets all of the following conditions. Amended tax return for 2010 The contribution is in cash. Amended tax return for 2010 The contribution is made before the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. Amended tax return for 2010 The contribution would not result in total contributions for the year (not including rollover contributions) being more than $2,000. Amended tax return for 2010 Money in the account cannot be invested in life insurance contracts. Amended tax return for 2010 Money in the account cannot be combined with other property except in a common trust fund or common investment fund. Amended tax return for 2010 The balance in the account generally must be distributed within 30 days after the earlier of the following events. Amended tax return for 2010 The beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary. Amended tax return for 2010 The beneficiary's death. Amended tax return for 2010 Qualified Education Expenses Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. Amended tax return for 2010 For purposes of Coverdell ESAs, the expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses. Amended tax return for 2010 Designated beneficiary. Amended tax return for 2010   This is the individual named in the document creating the trust or custodial account to receive the benefit of the funds in the account. Amended tax return for 2010 Contributions to a qualified tuition program (QTP). Amended tax return for 2010   A contribution to a QTP is a qualified education expense if the contribution is on behalf of the designated beneficiary of the Coverdell ESA. Amended tax return for 2010 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. Amended tax return for 2010 See chapter 8, Qualified Tuition Program . Amended tax return for 2010 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. Amended tax return for 2010 Eligible postsecondary school. Amended tax return for 2010   This is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Amended tax return for 2010 S. Amended tax return for 2010 Department of Education. Amended tax return for 2010 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Amended tax return for 2010 The educational institution should be able to tell you if it is an eligible educational institution. Amended tax return for 2010   Certain educational institutions located outside the United States also participate in the U. Amended tax return for 2010 S. Amended tax return for 2010 Department of Education's Federal Student Aid (FSA) programs. Amended tax return for 2010 Eligible elementary or secondary school. Amended tax return for 2010   This is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law. Amended tax return for 2010 Qualified Higher Education Expenses These are expenses related to enrollment or attendance at an eligible postsecondary school. Amended tax return for 2010 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. Amended tax return for 2010 The following expenses must be required for enrollment or attendance of a designated beneficiary at an eligible postsecondary school. Amended tax return for 2010 Tuition and fees. Amended tax return for 2010 Books, supplies, and equipment. Amended tax return for 2010 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. Amended tax return for 2010 Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). Amended tax return for 2010 The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts. Amended tax return for 2010 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. Amended tax return for 2010 The actual amount charged if the student is residing in housing owned or operated by the school. Amended tax return for 2010 Half-time student. Amended tax return for 2010   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. Amended tax return for 2010 Qualified Elementary and Secondary Education Expenses These are expenses related to enrollment or attendance at an eligible elementary or secondary school. Amended tax return for 2010 As shown in the following list, to be qualified, some of the expenses must be required or provided by the school. Amended tax return for 2010 There are special rules for computer-related expenses. Amended tax return for 2010 The following expenses must be incurred by a designated beneficiary in connection with enrollment or attendance at an eligible elementary or secondary school. Amended tax return for 2010 Tuition and fees. Amended tax return for 2010 Books, supplies, and equipment. Amended tax return for 2010 Academic tutoring. Amended tax return for 2010 Special needs services for a special needs beneficiary. Amended tax return for 2010 The following expenses must be required or provided by an eligible elementary or secondary school in connection with attendance or enrollment at the school. Amended tax return for 2010 Room and board. Amended tax return for 2010 Uniforms. Amended tax return for 2010 Transportation. Amended tax return for 2010 Supplementary items and services (including extended day programs). Amended tax return for 2010 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. Amended tax return for 2010 (This does not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. Amended tax return for 2010 ) 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. Amended tax return for 2010 For individuals filing joint returns, that amount is $220,000. Amended tax return for 2010 Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. Amended tax return for 2010 There is no requirement that an organization's income be below a certain level. Amended tax return for 2010 Contributions must meet all of the following requirements. Amended tax return for 2010 They must be in cash. Amended tax return for 2010 They cannot be made after the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. Amended tax return for 2010 They must be made by the due date of the contributor's tax return (not including extensions). Amended tax return for 2010 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. Amended tax return for 2010 Contributions can be made, without penalty, to both a Coverdell ESA and a QTP in the same year for the same beneficiary. Amended tax return for 2010 Table 7-2 summarizes many of the features of contributing to a Coverdell ESA. Amended tax return for 2010 When contributions considered made. Amended tax return for 2010   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. Amended tax return for 2010 They must be made by the due date (not including extensions) for filing your return for the preceding year. Amended tax return for 2010   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. Amended tax return for 2010 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. Amended tax return for 2010 Limit for each designated beneficiary. Amended tax return for 2010   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. Amended tax return for 2010 This includes contributions (other than rollovers) to all the beneficiary's Coverdell ESAs from all sources. Amended tax return for 2010 Rollovers are discussed under Rollovers and Other Transfers , later. Amended tax return for 2010 Example. Amended tax return for 2010 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. Amended tax return for 2010 In 2013, the total of all contributions to Maria's three Coverdell ESAs cannot be more than $2,000. Amended tax return for 2010 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. Amended tax return for 2010 Or, if her parents contributed $1,000 and her aunt $600, her grandfather or someone else could contribute no more than $400. Amended tax return for 2010 These contributions could be put into any of Maria's Coverdell ESA accounts. Amended tax return for 2010 Limit for each contributor. Amended tax return for 2010   Generally, you can contribute up to $2,000 for each designated beneficiary for 2013. Amended tax return for 2010 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. Amended tax return for 2010 Example. Amended tax return for 2010 The facts are the same as in the previous example except that Maria Luna's older brother, Edgar, also has a Coverdell ESA. Amended tax return for 2010 If their grandfather contributed $2,000 to Maria's Coverdell ESA in 2013, he could also contribute $2,000 to Edgar's Coverdell ESA. Amended tax return for 2010 Reduced limit. Amended tax return for 2010   Your contribution limit may be reduced. Amended tax return for 2010 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). Amended tax return for 2010 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. Amended tax return for 2010 Table 7-2. Amended tax return for 2010 Coverdell ESA Contributions at a Glance Do not rely on this table alone. Amended tax return for 2010 It provides only general highlights. Amended tax return for 2010 See the text for more complete explanations. Amended tax return for 2010 Question Answer Are contributions deductible? No. Amended tax return for 2010 What is the annual contribution limit per designated beneficiary? $2,000 for each designated beneficiary. Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 Can contributions other than cash be made to a Coverdell ESA? No. Amended tax return for 2010 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. Amended tax return for 2010 Modified adjusted gross income (MAGI). Amended tax return for 2010   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. Amended tax return for 2010 MAGI when using Form 1040A. Amended tax return for 2010   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. Amended tax return for 2010 MAGI when using Form 1040. Amended tax return for 2010   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. Amended tax return for 2010 MAGI when using Form 1040NR. Amended tax return for 2010   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form. Amended tax return for 2010 MAGI when using Form 1040NR-EZ. Amended tax return for 2010   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form. Amended tax return for 2010   If you have any of these adjustments, you can use Worksheet 7-1. Amended tax return for 2010 MAGI for a Coverdell ESA , later, to figure your MAGI for Form 1040. Amended tax return for 2010 Worksheet 7-1. Amended tax return for 2010 MAGI for a Coverdell ESA 1. Amended tax return for 2010 Enter your adjusted gross income  (Form 1040, line 38)   1. Amended tax return for 2010   2. Amended tax return for 2010 Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. Amended tax return for 2010       3. Amended tax return for 2010 Enter your foreign housing deduction (Form 2555, line 50)   3. Amended tax return for 2010         4. Amended tax return for 2010 Enter the amount of income from Puerto Rico you are excluding   4. Amended tax return for 2010       5. Amended tax return for 2010 Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. Amended tax return for 2010       6. Amended tax return for 2010 Add lines 2, 3, 4, and 5   6. Amended tax return for 2010   7. Amended tax return for 2010 Add lines 1 and 6. Amended tax return for 2010 This is your  modified adjusted gross income   7. Amended tax return for 2010   Figuring the limit. Amended tax return for 2010    To figure the limit on the amount you can contribute for each designated beneficiary, multiply $2,000 by a fraction. Amended tax return for 2010 The numerator (top number) is your MAGI minus $95,000 ($190,000 if filing a joint return). Amended tax return for 2010 The denominator (bottom number) is $15,000 ($30,000 if filing a joint return). Amended tax return for 2010 Subtract the result from $2,000. Amended tax return for 2010 This is the amount you can contribute for each beneficiary. Amended tax return for 2010 You can use Worksheet 7-2. Amended tax return for 2010 Coverdell ESA Contribution Limit to figure the limit on contributions. Amended tax return for 2010    Worksheet 7-2. Amended tax return for 2010 Coverdell ESA Contribution Limit 1. Amended tax return for 2010 Maximum contribution   1. Amended tax return for 2010 $2,000 2. Amended tax return for 2010 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. Amended tax return for 2010   3. Amended tax return for 2010 Enter $190,000 if married filing jointly; $95,000 for all other filers   3. Amended tax return for 2010   4. Amended tax return for 2010 Subtract line 3 from line 2. Amended tax return for 2010 If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. Amended tax return for 2010   5. Amended tax return for 2010 Enter $30,000 if married filing jointly; $15,000 for all other filers   5. Amended tax return for 2010     Note. Amended tax return for 2010 If the amount on line 4 is greater than or equal to the amount on line 5, stop here. Amended tax return for 2010 You are not allowed to contribute to a Coverdell ESA for 2013. Amended tax return for 2010       6. Amended tax return for 2010 Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. Amended tax return for 2010 . Amended tax return for 2010 7. Amended tax return for 2010 Multiply line 1 by line 6   7. Amended tax return for 2010   8. Amended tax return for 2010 Subtract line 7 from line 1   8. Amended tax return for 2010   Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. Amended tax return for 2010 Example. Amended tax return for 2010 Paul, who is single, had a MAGI of $96,500 for 2013. Amended tax return for 2010 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. Amended tax return for 2010 Worksheet 7-2. Amended tax return for 2010 Coverdell ESA Contribution Limit—Illustrated 1. Amended tax return for 2010 Maximum contribution   1. Amended tax return for 2010 $2,000 2. Amended tax return for 2010 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. Amended tax return for 2010 96,500 3. Amended tax return for 2010 Enter $190,000 if married filing jointly; $95,000 for all other filers   3. Amended tax return for 2010 95,000 4. Amended tax return for 2010 Subtract line 3 from line 2. Amended tax return for 2010 If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. Amended tax return for 2010 1,500 5. Amended tax return for 2010 Enter $30,000 if married filing jointly; $15,000 for all other filers   5. Amended tax return for 2010 15,000   Note. Amended tax return for 2010 If the amount on line 4 is greater than or equal to the amount on line 5,  stop here. Amended tax return for 2010 You are not allowed to  contribute to a Coverdell ESA for 2013. Amended tax return for 2010       6. Amended tax return for 2010 Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. Amended tax return for 2010 . Amended tax return for 2010 100 7. Amended tax return for 2010 Multiply line 1 by line 6   7. Amended tax return for 2010 200 8. Amended tax return for 2010 Subtract line 7 from line 1   8. Amended tax return for 2010 1,800 Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. Amended tax return for 2010 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. Amended tax return for 2010 Excess contributions are the total of the following two amounts. Amended tax return for 2010 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). Amended tax return for 2010 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. Amended tax return for 2010 Exceptions. Amended tax return for 2010   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). Amended tax return for 2010   However, you must include the distributed earnings in gross income for the year in which the excess contribution was made. Amended tax return for 2010 You should receive Form 1099-Q, Payments From Qualified Education Programs, from each institution from which excess contributions were distributed. Amended tax return for 2010 Box 2 of that form will show the amount of earnings on your excess contributions. Amended tax return for 2010 Code “2” or “3” entered in the blank box below boxes 5 and 6 indicate the year in which the earnings are taxable. Amended tax return for 2010 See Instructions for Recipient on the back of copy B of your Form 1099-Q. Amended tax return for 2010 Enter the amount of earnings on line 21 of Form 1040 (or Form 1040NR) for the applicable tax year. Amended tax return for 2010 For more information, see Taxable Distributions , later. Amended tax return for 2010   The excise tax does not apply to any rollover contribution. Amended tax return for 2010 Note. Amended tax return for 2010 Contributions made in one year for the preceding tax year are considered to have been made on the last day of the preceding year. Amended tax return for 2010 Example. Amended tax return for 2010 In 2012, Greta's parents and grandparents contributed a total of $2,300 to Greta's Coverdell ESA— an excess contribution of $300. Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 (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. Amended tax return for 2010 Figuring and reporting the additional tax. Amended tax return for 2010   You figure this excise tax in Part V of Form 5329. Amended tax return for 2010 Report the additional tax on Form 1040, line 58 (or Form 1040NR, line 56). Amended tax return for 2010 Rollovers and Other Transfers Assets can be rolled over from one Coverdell ESA to another or the designated beneficiary can be changed. Amended tax return for 2010 The beneficiary's interest can be transferred to a spouse or former spouse because of divorce. Amended tax return for 2010 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. Amended tax return for 2010 This age limitation does not apply if the new beneficiary is a special needs beneficiary. Amended tax return for 2010 An amount is rolled over if it is paid to another Coverdell ESA within 60 days after the date of the distribution. Amended tax return for 2010 Do not report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. Amended tax return for 2010 These are not taxable distributions. Amended tax return for 2010 Members of the beneficiary's family. Amended tax return for 2010   For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary. Amended tax return for 2010 Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. Amended tax return for 2010 Brother, sister, stepbrother, or stepsister. Amended tax return for 2010 Father or mother or ancestor of either. Amended tax return for 2010 Stepfather or stepmother. Amended tax return for 2010 Son or daughter of a brother or sister. Amended tax return for 2010 Brother or sister of father or mother. Amended tax return for 2010 Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. Amended tax return for 2010 The spouse of any individual listed above. Amended tax return for 2010 First cousin. Amended tax return for 2010 Example. Amended tax return for 2010 When Aaron graduated from college last year he had $5,000 left in his Coverdell ESA. Amended tax return for 2010 He wanted to give this money to his younger sister, who was still in high school. Amended tax return for 2010 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. Amended tax return for 2010 Only one rollover per Coverdell ESA is allowed during the 12-month period ending on the date of the payment or distribution. Amended tax return for 2010 This rule does not apply to the rollover of a military death gratuity or payment from Servicemembers' Group Life Insurance (SGLI). Amended tax return for 2010 Military death gratuity. Amended tax return for 2010   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). Amended tax return for 2010 Such payments are made to an eligible survivor upon the death of a member of the armed forces. Amended tax return for 2010 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. Amended tax return for 2010   This rollover contribution is not subject to (but is in addition to) the contribution limits discussed earlier under Contribution Limits . Amended tax return for 2010 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. Amended tax return for 2010   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. Amended tax return for 2010 See Distributions , later. Amended tax return for 2010 The limit of one rollover per Coverdell ESA during a 12-month period does not apply to a military death gratuity or SGLI payment. Amended tax return for 2010 Changing the Designated Beneficiary The designated beneficiary can be changed. Amended tax return for 2010 See Members of the beneficiary's family , earlier. Amended tax return for 2010 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. Amended tax return for 2010 Example. Amended tax return for 2010 Assume the same situation for Aaron as in the last example (see Rollovers , earlier). Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 After the transfer, the spouse or former spouse treats the Coverdell ESA as his or her own. Amended tax return for 2010 Example. Amended tax return for 2010 In their divorce settlement, Peg received her ex-husband's Coverdell ESA. Amended tax return for 2010 In this process, the account was transferred into her name. Amended tax return for 2010 Peg now treats the funds in this Coverdell ESA as if she were the original owner. Amended tax return for 2010 Distributions The designated beneficiary of a Coverdell ESA can take a distribution at any time. Amended tax return for 2010 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. Amended tax return for 2010 See Table 7-3, Coverdell ESA Distributions at a Glance, for highlights. Amended tax return for 2010 Table 7-3. Amended tax return for 2010 Coverdell ESA Distributions at a Glance Do not rely on this table alone. Amended tax return for 2010 It provides only general highlights. Amended tax return for 2010 See the text for definitions of terms in bold type and for more complete explanations. Amended tax return for 2010 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. Amended tax return for 2010 After the designated beneficiary completes his or her education at an eligible educational institution, can amounts remaining in the Coverdell ESA be distributed? Yes. Amended tax return for 2010 Amounts must be distributed when the designated beneficiary reaches age 30, unless he or she is a special needs beneficiary. Amended tax return for 2010 Also, certain transfers to members of the beneficiary's family are permitted. Amended tax return for 2010 Does the designated beneficiary need to be enrolled for a minimum number of courses to take a tax-free distribution? No. Amended tax return for 2010 Adjusted qualified education expenses. Amended tax return for 2010   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. Amended tax return for 2010 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. Amended tax return for 2010 The amount you get by subtracting tax-free educational assistance from your total qualified education expenses is your adjusted qualified education expenses. Amended tax return for 2010 Tax-Free Distributions Generally, distributions are tax free if they are not more than the beneficiary's adjusted qualified education expenses for the year. Amended tax return for 2010 Do not report tax-free distributions (including qualifying rollovers) on your tax return. Amended tax return for 2010 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. Amended tax return for 2010 Excess distribution. Amended tax return for 2010   This is the part of the total distribution that is more than the beneficiary's adjusted qualified education expenses for the year. Amended tax return for 2010 Earnings and basis. Amended tax return for 2010   You will receive a Form 1099-Q for each of the Coverdell ESAs from which money was distributed in 2013. Amended tax return for 2010 The amount of your gross distribution will be shown in box 1. Amended tax return for 2010 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. Amended tax return for 2010 This will be shown in the blank box below boxes 5 and 6. Amended tax return for 2010   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. Amended tax return for 2010 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. Amended tax return for 2010 Figure the taxable portion for 2013 as shown in the following steps. Amended tax return for 2010 Multiply the total amount distributed by a fraction. Amended tax return for 2010 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. Amended tax return for 2010 Subtract the amount figured in (1) from the total amount distributed during 2013. Amended tax return for 2010 The result is the amount of earnings included in the distribution(s). Amended tax return for 2010 Multiply the amount of earnings figured in (2) by a fraction. Amended tax return for 2010 The numerator is the adjusted qualified education expenses paid during 2013 and the denominator is the total amount distributed during 2013. Amended tax return for 2010 Subtract the amount figured in (3) from the amount figured in (2). Amended tax return for 2010 The result is the amount the beneficiary must include in income. Amended tax return for 2010 The taxable amount must be reported on Form 1040 or Form 1040NR, line 21. Amended tax return for 2010 Example. Amended tax return for 2010 You received an $850 distribution from your Coverdell ESA, to which $1,500 had been contributed before 2013. Amended tax return for 2010 There were no contributions in 2013. Amended tax return for 2010 This is your first distribution from the account, so your basis in the account on December 31, 2012, was $1,500. Amended tax return for 2010 The value (balance) of your account on December 31, 2013, was $950. Amended tax return for 2010 You had $700 of adjusted qualified education expenses (AQEE) for the year. Amended tax return for 2010 Using the steps in Figuring the Taxable Portion of a Distribution , earlier, figure the taxable portion of your distribution as follows. Amended tax return for 2010   1. Amended tax return for 2010 $850 (distribution) × $1,500 basis + $0 contributions  $950 value + $850 distribution       =$708 (basis portion of distribution)     2. Amended tax return for 2010 $850 (distribution)−$708 (basis portion of distribution)     =$142 (earnings included in distribution)   3. Amended tax return for 2010 $142 (earnings) × $700 AQEE  $850 distribution           =$117 (tax-free earnings)     4. Amended tax return for 2010 $142 (earnings)−$117 (tax-free earnings)=$25 (taxable earnings)                 You must include $25 in income as distributed earnings not used for qualified education expenses. Amended tax return for 2010 Report this amount on Form 1040, line 21, listing the type and amount of income on the dotted line. Amended tax return for 2010 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). Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 Example. Amended tax return for 2010 Derek Green had $5,800 of qualified higher education expenses for 2013, his first year in college. Amended tax return for 2010 He paid his college expenses from the following sources. Amended tax return for 2010     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. Amended tax return for 2010 Derek's parents claimed a $2,500 American opportunity credit (based on $4,000 expenses) on their tax return. Amended tax return for 2010 Before Derek can determine the taxable portion of his Coverdell ESA distribution, he must reduce his total qualified higher education expenses. Amended tax return for 2010     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. Amended tax return for 2010 The balance in Derek's account was $1,800 on December 31, 2013. Amended tax return for 2010 Prior to 2013, $2,100 had been contributed to this account. Amended tax return for 2010 Contributions for 2013 totaled $400. Amended tax return for 2010 Using the four steps outlined earlier, Derek figures the taxable portion of his distribution as shown below. Amended tax return for 2010   1. Amended tax return for 2010 $1,000 (distribution) × $2,100 basis + $400 contributions  $1,800 value + $1,000 distribution           =$893 (basis portion of distribution)     2. Amended tax return for 2010 $1,000 (distribution)−$893 (basis portion of distribution)     = $107 (earnings included in distribution)   3. Amended tax return for 2010 $107 (earnings) × $300 AQHEE  $1,000 distribution       =$32 (tax-free earnings)     4. Amended tax return for 2010 $107 (earnings)−$32 (tax-free earnings)=$75 (taxable earnings)                 Derek must include $75 in income (Form 1040, line 21). Amended tax return for 2010 This is the amount of distributed earnings not used for adjusted qualified higher education expenses. Amended tax return for 2010 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. Amended tax return for 2010 The following two examples illustrate possible allocations. Amended tax return for 2010 Example 1. Amended tax return for 2010 In 2013, Beatrice graduated from high school and began her first semester of college. Amended tax return for 2010 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. Amended tax return for 2010 To pay these expenses, Beatrice withdrew $800 from her Coverdell ESA and $4,200 from her QTP. Amended tax return for 2010 No one claimed Beatrice as a dependent, nor was she eligible for an education credit. Amended tax return for 2010 She did not receive any tax-free educational assistance in 2013. Amended tax return for 2010 Beatrice must allocate her total qualified education expenses between the two distributions. Amended tax return for 2010 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. Amended tax return for 2010 The qualified expenses are greater than the distribution, making the $800 Coverdell ESA distribution tax free. Amended tax return for 2010 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). Amended tax return for 2010 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. Amended tax return for 2010 Finally, Beatrice figures the taxable and tax-free portions of her QTP distribution based on her $3,000 of QHEE. Amended tax return for 2010 (See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program for more information. Amended tax return for 2010 ) Example 2. Amended tax return for 2010 Assume the same facts as in Example 1 , except that Beatrice withdrew $1,800 from her Coverdell ESA and $3,200 from her QTP. Amended tax return for 2010 In this case, she allocates her qualified education expenses as follows. Amended tax return for 2010 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. Amended tax return for 2010 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). Amended tax return for 2010   $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). Amended tax return for 2010 See Figuring the Taxable Portion of a Distribution , earlier, in this chapter. Amended tax return for 2010   QTP distribution based on her $2,400 of QHEE (see Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program). Amended tax return for 2010 The above examples show two types of allocation between distributions from a Coverdell ESA and a QTP. Amended tax return for 2010 However, you do not have to allocate your expenses in the same way. Amended tax return for 2010 You can use any reasonable method. Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 Your basis is the total amount of contributions to that Coverdell ESA. Amended tax return for 2010 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. Amended tax return for 2010 If you have distributions from more than one Coverdell ESA account during a year, you must combine the information (amount of distribution, basis, etc. Amended tax return for 2010 ) from all such accounts in order to determine your taxable earnings for the year. Amended tax return for 2010 By doing this, the loss from one ESA account reduces the distributed earnings (if any) from any other ESA account. Amended tax return for 2010 For examples of the calculation, see Losses on QTP Investments in chapter 8, Qualified Tuition Program. Amended tax return for 2010 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. Amended tax return for 2010 Exceptions. Amended tax return for 2010   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. Amended tax return for 2010 Made because the designated beneficiary is disabled. Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 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. Amended tax return for 2010 Made on account of the attendance of the designated beneficiary at a U. Amended tax return for 2010 S. Amended tax return for 2010 military academy (such as the USMA at West Point). Amended tax return for 2010 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. Amended tax return for 2010 S. Amended tax return for 2010 Code) attributable to such attendance. Amended tax return for 2010 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). Amended tax return for 2010 Made before June 1, 2014, of an excess 2013 contribution (and any earnings on it). Amended tax return for 2010 The distributed earnings must be included in gross income for the year in which the excess contribution was made. Amended tax return for 2010 Exception (3) applies only to the extent the distribution is not more than the scholarship, allowance, or payment. Amended tax return for 2010 Figuring the additional tax. Amended tax return for 2010    Use Part II of Form 5329, to figure any additional tax. Amended tax return for 2010 Report the amount on Form 1040, line 58, or Form 1040NR, line 56. Amended tax return for 2010 When Assets Must Be Distributed Any assets remaining in a Coverdell ESA must be distributed when either one of the following two events occurs. Amended tax return for 2010 The designated beneficiary reaches age 30. Amended tax return for 2010 In this case, the remaining assets must be distributed within 30 days after the beneficiary reaches age 30. Amended tax return for 2010 However, this rule does not apply if the beneficiary is a special needs beneficiary. Amended tax return for 2010 The designated beneficiary dies before reaching age 30. Amended tax return for 2010 In this case, the remaining assets must generally be distributed within 30 days after the date of death. Amended tax return for 2010 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. Amended tax return for 2010 (“Family member” was defined earlier under Rollovers . Amended tax return for 2010 ) 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. Amended tax return for 2010 This age limitation does not apply if the new beneficiary is a special needs beneficiary. Amended tax return for 2010 There are no tax consequences as a result of the transfer. Amended tax return for 2010 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. Amended tax return for 2010 You determine these earnings as shown in the following two steps. Amended tax return for 2010 Multiply the amount distributed by a fraction. Amended tax return for 2010 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. Amended tax return for 2010 Subtract the amount figured in (1) from the total amount distributed during 2013. Amended tax return for 2010 The result is the amount of earnings included in the distribution. Amended tax return for 2010 For an example, see steps (1) and (2) of the Example under Figuring the Taxable Portion of a Distribution, earlier. Amended tax return for 2010 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. Amended tax return for 2010 Worksheet 7-3 Instructions. Amended tax return for 2010 Coverdell ESA—Taxable Distributions and Basis Line G. Amended tax return for 2010 Enter the total distributions received from all Coverdell ESAs during 2013. Amended tax return for 2010 Do not include amounts rolled over to another ESA within 60 days (only one rollover is allowed during any 12-month period). Amended tax return for 2010 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. Amended tax return for 2010 Line 2. Amended tax return for 2010 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. Amended tax return for 2010   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. Amended tax return for 2010 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. Amended tax return for 2010 For years after 2001, you can find that amount by using the ending basis from the worksheet in Publication 970 for that year. Amended tax return for 2010 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. Amended tax return for 2010 Line 4. Amended tax return for 2010 Enter the total distributions received from this Coverdell ESA in 2013. Amended tax return for 2010 Do not include amounts rolled over to another Coverdell ESA within 60 days (only one rollover is allowed during any 12-month period). Amended tax return for 2010   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. Amended tax return for 2010 Line 7. Amended tax return for 2010 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. Amended tax return for 2010 A statement should be sent to you by January 31, 2014, for this Coverdell ESA showing the value on December 31, 2013. Amended tax return for 2010   A rollover is a tax-free withdrawal from one Coverdell ESA that is contributed to another Coverdell ESA. Amended tax return for 2010 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. Amended tax return for 2010 Worksheet 7-3. Amended tax return for 2010 Coverdell ESA—Taxable Distributions and Basis How to complete this worksheet. Amended tax return for 2010 • • • Complete Part I, lines A through H, on only one worksheet. Amended tax return for 2010  Complete a separate Part II, lines 1 through 15, for each of your Coverdell ESAs. Amended tax return for 2010  Complete Part III, the Summary (line 16), on only one worksheet. Amended tax return for 2010 Part I. Amended tax return for 2010 Qualified Education Expenses (Complete for total expenses)       A. Amended tax return for 2010 Enter your total qualified education expenses for 2013   A. Amended tax return for 2010   B. Amended tax return for 2010 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. Amended tax return for 2010         C. Amended tax return for 2010 Enter those qualified higher education expenses deducted on Schedule C or C-EZ (Form 1040). Amended tax return for 2010 Schedule F (Form 1040), or as a miscellaneous itemized deduction on Schedule A (Form 1040 or 1040NR)   C. Amended tax return for 2010         D. Amended tax return for 2010 Enter those qualified higher education expenses on which  an American opportunity or lifetime learning credit was based   D. Amended tax return for 2010         E. Amended tax return for 2010 Add lines B, C, and D   D. Amended tax return for 2010   F. Amended tax return for 2010 Subtract line E from line A. Amended tax return for 2010 This is your adjusted qualified education expense for 2013   E. Amended tax return for 2010   G. Amended tax return for 2010 Enter your total distributions from all Coverdell ESAs during 2013. Amended tax return for 2010 Do not include rollovers  or the return of excess contributions (see instructions)   F. Amended tax return for 2010   H. Amended tax return for 2010 Divide line F by line G. Amended tax return for 2010 Enter the result as a decimal (rounded to at least 3 places). Amended tax return for 2010 If the  result is 1. Amended tax return for 2010 000 or more, enter 1. Amended tax return for 2010 000   G. Amended tax return for 2010 . Amended tax return for 2010 Part II. Amended tax return for 2010 Taxable Distributions and Basis (Complete separately for each account) 1. Amended tax return for 2010 Enter the amount contributed to this Coverdell ESA for 2013, including contributions made for 2013 from January 1, 2014, through April 15, 2014. Amended tax return for 2010 Do not include rollovers or the return of excess contributions   1. Amended tax return for 2010   2. Amended tax return for 2010 Enter your basis in this Coverdell ESA as of December 31, 2012 (see instructions)   2. Amended tax return for 2010   3. Amended tax return for 2010 Add lines 1 and 2   3. Amended tax return for 2010   4. Amended tax return for 2010 Enter the total distributions from this Coverdell ESA during 2013. Amended tax return for 2010 Do not include rollovers  or the return of excess contributions (see instructions)   4. Amended tax return for 2010   5. Amended tax return for 2010 Multiply line 4 by line H. Amended tax return for 2010 This is the amount of adjusted qualified  education expense attributable to this Coverdell ESA   5. Amended tax return for 2010         6. Amended tax return for 2010 Subtract line 5 from line 4   6. Amended tax return for 2010         7. Amended tax return for 2010 Enter the total value of this Coverdell ESA as of December 31, 2013,  plus any outstanding rollovers (see instructions)   7. Amended tax return for 2010         8. Amended tax return for 2010 Add lines 4 and 7   8. Amended tax return for 2010         9. Amended tax return for 2010 Divide line 3 by line 8. Amended tax return for 2010 Enter the result as a decimal (rounded to  at least 3 places). Amended tax return for 2010 If the result is 1. Amended tax return for 2010 000 or more, enter 1. Amended tax return for 2010 000   9. Amended tax return for 2010 . Amended tax return for 2010       10. Amended tax return for 2010 Multiply line 4 by line 9. Amended tax return for 2010 This is the amount of basis allocated to your  distributions, and is tax free   10. Amended tax return for 2010     Note. Amended tax return for 2010 If line 6 is zero, skip lines 11 through 13, enter -0- on line 14, and go to line 15. Amended tax return for 2010       11. Amended tax return for 2010 Subtract line 10 from line 4   11. Amended tax return for 2010   12. Amended tax return for 2010 Divide line 5 by line 4. Amended tax return for 2010 Enter the result as a decimal (rounded to  at least 3 places). Amended tax return for 2010 If the result is 1. Amended tax return for 2010 000 or more, enter 1. Amended tax return for 2010 000   12. Amended tax return for 2010 . Amended tax return for 2010       13. Amended tax return for 2010 Multiply line 11 by line 12. Amended tax return for 2010 This is the amount of qualified education  expenses allocated to your distributions, and is tax free   13. Amended tax return for 2010   14. Amended tax return for 2010 Subtract line 13 from line 11. Amended tax return for 2010 This is the portion of the distributions from this  Coverdell ESA in 2013 that you must include in income   14. Amended tax return for 2010   15. Amended tax return for 2010 Subtract line 10 from line 3. Amended tax return for 2010 This is your basis in this Coverdell ESA as of December 31, 2013   15. Amended tax return for 2010   Part III. Amended tax return for 2010 Summary (Complete only once)       16. Amended tax return for 2010 Taxable amount. Amended tax return for 2010 Add together all amounts on line 14 for all your Coverdell ESAs. Amended tax return for 2010 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. Amended tax return for 2010   Prev  Up  Next   Home   More Online Publications