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Amended Federal Tax Return 2011

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Amended Federal Tax Return 2011

Amended federal tax return 2011 7. Amended federal tax return 2011   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 federal tax return 2011 For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return. Amended federal tax return 2011 There is no limit on the number of separate Coverdell ESAs that can be established for a designated beneficiary. Amended federal tax return 2011 However, total contributions for the beneficiary in any year cannot be more than $2,000, no matter how many accounts have been established. Amended federal tax return 2011 See Contributions , later. Amended federal tax return 2011 This benefit applies not only to higher education expenses, but also to elementary and secondary education expenses. Amended federal tax return 2011 What is the tax benefit of the Coverdell ESA. Amended federal tax return 2011   Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. Amended federal tax return 2011   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 federal tax return 2011 See Tax-Free Distributions , later. Amended federal tax return 2011    Table 7-1 summarizes the main features of the Coverdell ESA. Amended federal tax return 2011 Table 7-1. Amended federal tax return 2011 Coverdell ESA at a Glance Do not rely on this table alone. Amended federal tax return 2011 It provides only general highlights. Amended federal tax return 2011 See the text for definitions of terms in bold type and for more complete explanations. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Who can have a Coverdell ESA? Any beneficiary who is under age 18 or is a special needs beneficiary. Amended federal tax return 2011 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 federal tax return 2011 Are distributions tax free? Yes, if the distributions are not more than the beneficiary's adjusted qualified education expenses for the year. Amended federal tax return 2011 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 federal tax return 2011 When the account is established, the designated beneficiary must be under age 18 or a special needs beneficiary. Amended federal tax return 2011 To be treated as a Coverdell ESA, the account must be designated as a Coverdell ESA when it is created. Amended federal tax return 2011 The document creating and governing the account must be in writing and must satisfy the following requirements. Amended federal tax return 2011 The trustee or custodian must be a bank or an entity approved by the IRS. Amended federal tax return 2011 The document must provide that the trustee or custodian can only accept a contribution that meets all of the following conditions. Amended federal tax return 2011 The contribution is in cash. Amended federal tax return 2011 The contribution is made before the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. Amended federal tax return 2011 The contribution would not result in total contributions for the year (not including rollover contributions) being more than $2,000. Amended federal tax return 2011 Money in the account cannot be invested in life insurance contracts. Amended federal tax return 2011 Money in the account cannot be combined with other property except in a common trust fund or common investment fund. Amended federal tax return 2011 The balance in the account generally must be distributed within 30 days after the earlier of the following events. Amended federal tax return 2011 The beneficiary reaches age 30, unless the beneficiary is a special needs beneficiary. Amended federal tax return 2011 The beneficiary's death. Amended federal tax return 2011 Qualified Education Expenses Generally, these are expenses required for the enrollment or attendance of the designated beneficiary at an eligible educational institution. Amended federal tax return 2011 For purposes of Coverdell ESAs, the expenses can be either qualified higher education expenses or qualified elementary and secondary education expenses. Amended federal tax return 2011 Designated beneficiary. Amended federal tax return 2011   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 federal tax return 2011 Contributions to a qualified tuition program (QTP). Amended federal tax return 2011   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 federal tax return 2011 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 federal tax return 2011 See chapter 8, Qualified Tuition Program . Amended federal tax return 2011 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 federal tax return 2011 Eligible postsecondary school. Amended federal tax return 2011   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 federal tax return 2011 S. Amended federal tax return 2011 Department of Education. Amended federal tax return 2011 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Amended federal tax return 2011 The educational institution should be able to tell you if it is an eligible educational institution. Amended federal tax return 2011   Certain educational institutions located outside the United States also participate in the U. Amended federal tax return 2011 S. Amended federal tax return 2011 Department of Education's Federal Student Aid (FSA) programs. Amended federal tax return 2011 Eligible elementary or secondary school. Amended federal tax return 2011   This is any public, private, or religious school that provides elementary or secondary education (kindergarten through grade 12), as determined under state law. Amended federal tax return 2011 Qualified Higher Education Expenses These are expenses related to enrollment or attendance at an eligible postsecondary school. Amended federal tax return 2011 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 federal tax return 2011 The following expenses must be required for enrollment or attendance of a designated beneficiary at an eligible postsecondary school. Amended federal tax return 2011 Tuition and fees. Amended federal tax return 2011 Books, supplies, and equipment. Amended federal tax return 2011 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 federal tax return 2011 Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below). Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 The actual amount charged if the student is residing in housing owned or operated by the school. Amended federal tax return 2011 Half-time student. Amended federal tax return 2011   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 federal tax return 2011 Qualified Elementary and Secondary Education Expenses These are expenses related to enrollment or attendance at an eligible elementary or secondary school. Amended federal tax return 2011 As shown in the following list, to be qualified, some of the expenses must be required or provided by the school. Amended federal tax return 2011 There are special rules for computer-related expenses. Amended federal tax return 2011 The following expenses must be incurred by a designated beneficiary in connection with enrollment or attendance at an eligible elementary or secondary school. Amended federal tax return 2011 Tuition and fees. Amended federal tax return 2011 Books, supplies, and equipment. Amended federal tax return 2011 Academic tutoring. Amended federal tax return 2011 Special needs services for a special needs beneficiary. Amended federal tax return 2011 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 federal tax return 2011 Room and board. Amended federal tax return 2011 Uniforms. Amended federal tax return 2011 Transportation. Amended federal tax return 2011 Supplementary items and services (including extended day programs). Amended federal tax return 2011 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 federal tax return 2011 (This does not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature. Amended federal tax return 2011 ) 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 federal tax return 2011 For individuals filing joint returns, that amount is $220,000. Amended federal tax return 2011 Organizations, such as corporations and trusts, can also contribute to Coverdell ESAs. Amended federal tax return 2011 There is no requirement that an organization's income be below a certain level. Amended federal tax return 2011 Contributions must meet all of the following requirements. Amended federal tax return 2011 They must be in cash. Amended federal tax return 2011 They cannot be made after the beneficiary reaches age 18, unless the beneficiary is a special needs beneficiary. Amended federal tax return 2011 They must be made by the due date of the contributor's tax return (not including extensions). Amended federal tax return 2011 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 federal tax return 2011 Contributions can be made, without penalty, to both a Coverdell ESA and a QTP in the same year for the same beneficiary. Amended federal tax return 2011 Table 7-2 summarizes many of the features of contributing to a Coverdell ESA. Amended federal tax return 2011 When contributions considered made. Amended federal tax return 2011   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 federal tax return 2011 They must be made by the due date (not including extensions) for filing your return for the preceding year. Amended federal tax return 2011   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 federal tax return 2011 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 federal tax return 2011 Limit for each designated beneficiary. Amended federal tax return 2011   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 federal tax return 2011 This includes contributions (other than rollovers) to all the beneficiary's Coverdell ESAs from all sources. Amended federal tax return 2011 Rollovers are discussed under Rollovers and Other Transfers , later. Amended federal tax return 2011 Example. Amended federal tax return 2011 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 federal tax return 2011 In 2013, the total of all contributions to Maria's three Coverdell ESAs cannot be more than $2,000. Amended federal tax return 2011 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 federal tax return 2011 Or, if her parents contributed $1,000 and her aunt $600, her grandfather or someone else could contribute no more than $400. Amended federal tax return 2011 These contributions could be put into any of Maria's Coverdell ESA accounts. Amended federal tax return 2011 Limit for each contributor. Amended federal tax return 2011   Generally, you can contribute up to $2,000 for each designated beneficiary for 2013. Amended federal tax return 2011 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 federal tax return 2011 Example. Amended federal tax return 2011 The facts are the same as in the previous example except that Maria Luna's older brother, Edgar, also has a Coverdell ESA. Amended federal tax return 2011 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 federal tax return 2011 Reduced limit. Amended federal tax return 2011   Your contribution limit may be reduced. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Table 7-2. Amended federal tax return 2011 Coverdell ESA Contributions at a Glance Do not rely on this table alone. Amended federal tax return 2011 It provides only general highlights. Amended federal tax return 2011 See the text for more complete explanations. Amended federal tax return 2011 Question Answer Are contributions deductible? No. Amended federal tax return 2011 What is the annual contribution limit per designated beneficiary? $2,000 for each designated beneficiary. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Can contributions other than cash be made to a Coverdell ESA? No. Amended federal tax return 2011 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 federal tax return 2011 Modified adjusted gross income (MAGI). Amended federal tax return 2011   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return. Amended federal tax return 2011 MAGI when using Form 1040A. Amended federal tax return 2011   If you file Form 1040A, your MAGI is the AGI on line 22 of that form. Amended federal tax return 2011 MAGI when using Form 1040. Amended federal tax return 2011   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 federal tax return 2011 MAGI when using Form 1040NR. Amended federal tax return 2011   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form. Amended federal tax return 2011 MAGI when using Form 1040NR-EZ. Amended federal tax return 2011   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form. Amended federal tax return 2011   If you have any of these adjustments, you can use Worksheet 7-1. Amended federal tax return 2011 MAGI for a Coverdell ESA , later, to figure your MAGI for Form 1040. Amended federal tax return 2011 Worksheet 7-1. Amended federal tax return 2011 MAGI for a Coverdell ESA 1. Amended federal tax return 2011 Enter your adjusted gross income  (Form 1040, line 38)   1. Amended federal tax return 2011   2. Amended federal tax return 2011 Enter your foreign earned income exclusion and/or housing exclusion (Form 2555, line 45, or Form 2555-EZ, line 18)   2. Amended federal tax return 2011       3. Amended federal tax return 2011 Enter your foreign housing deduction (Form 2555, line 50)   3. Amended federal tax return 2011         4. Amended federal tax return 2011 Enter the amount of income from Puerto Rico you are excluding   4. Amended federal tax return 2011       5. Amended federal tax return 2011 Enter the amount of income from American Samoa you are excluding (Form 4563, line 15)   5. Amended federal tax return 2011       6. Amended federal tax return 2011 Add lines 2, 3, 4, and 5   6. Amended federal tax return 2011   7. Amended federal tax return 2011 Add lines 1 and 6. Amended federal tax return 2011 This is your  modified adjusted gross income   7. Amended federal tax return 2011   Figuring the limit. Amended federal tax return 2011    To figure the limit on the amount you can contribute for each designated beneficiary, multiply $2,000 by a fraction. Amended federal tax return 2011 The numerator (top number) is your MAGI minus $95,000 ($190,000 if filing a joint return). Amended federal tax return 2011 The denominator (bottom number) is $15,000 ($30,000 if filing a joint return). Amended federal tax return 2011 Subtract the result from $2,000. Amended federal tax return 2011 This is the amount you can contribute for each beneficiary. Amended federal tax return 2011 You can use Worksheet 7-2. Amended federal tax return 2011 Coverdell ESA Contribution Limit to figure the limit on contributions. Amended federal tax return 2011    Worksheet 7-2. Amended federal tax return 2011 Coverdell ESA Contribution Limit 1. Amended federal tax return 2011 Maximum contribution   1. Amended federal tax return 2011 $2,000 2. Amended federal tax return 2011 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 federal tax return 2011   3. Amended federal tax return 2011 Enter $190,000 if married filing jointly; $95,000 for all other filers   3. Amended federal tax return 2011   4. Amended federal tax return 2011 Subtract line 3 from line 2. Amended federal tax return 2011 If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. Amended federal tax return 2011   5. Amended federal tax return 2011 Enter $30,000 if married filing jointly; $15,000 for all other filers   5. Amended federal tax return 2011     Note. Amended federal tax return 2011 If the amount on line 4 is greater than or equal to the amount on line 5, stop here. Amended federal tax return 2011 You are not allowed to contribute to a Coverdell ESA for 2013. Amended federal tax return 2011       6. Amended federal tax return 2011 Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. Amended federal tax return 2011 . Amended federal tax return 2011 7. Amended federal tax return 2011 Multiply line 1 by line 6   7. Amended federal tax return 2011   8. Amended federal tax return 2011 Subtract line 7 from line 1   8. Amended federal tax return 2011   Note: The total Coverdell ESA contributions from all sources for the designated beneficiary during the tax year may not exceed $2,000. Amended federal tax return 2011 Example. Amended federal tax return 2011 Paul, who is single, had a MAGI of $96,500 for 2013. Amended federal tax return 2011 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 federal tax return 2011 Worksheet 7-2. Amended federal tax return 2011 Coverdell ESA Contribution Limit—Illustrated 1. Amended federal tax return 2011 Maximum contribution   1. Amended federal tax return 2011 $2,000 2. Amended federal tax return 2011 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 federal tax return 2011 96,500 3. Amended federal tax return 2011 Enter $190,000 if married filing jointly; $95,000 for all other filers   3. Amended federal tax return 2011 95,000 4. Amended federal tax return 2011 Subtract line 3 from line 2. Amended federal tax return 2011 If zero or less, enter -0- on line 4, skip lines 5 through 7, and enter $2,000 on line 8   4. Amended federal tax return 2011 1,500 5. Amended federal tax return 2011 Enter $30,000 if married filing jointly; $15,000 for all other filers   5. Amended federal tax return 2011 15,000   Note. Amended federal tax return 2011 If the amount on line 4 is greater than or equal to the amount on line 5,  stop here. Amended federal tax return 2011 You are not allowed to  contribute to a Coverdell ESA for 2013. Amended federal tax return 2011       6. Amended federal tax return 2011 Divide line 4 by line 5 and enter the result as a decimal (rounded to at least 3 places)   6. Amended federal tax return 2011 . Amended federal tax return 2011 100 7. Amended federal tax return 2011 Multiply line 1 by line 6   7. Amended federal tax return 2011 200 8. Amended federal tax return 2011 Subtract line 7 from line 1   8. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Excess contributions are the total of the following two amounts. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Exceptions. Amended federal tax return 2011   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 federal tax return 2011   However, you must include the distributed earnings in gross income for the year in which the excess contribution was made. Amended federal tax return 2011 You should receive Form 1099-Q, Payments From Qualified Education Programs, from each institution from which excess contributions were distributed. Amended federal tax return 2011 Box 2 of that form will show the amount of earnings on your excess contributions. Amended federal tax return 2011 Code “2” or “3” entered in the blank box below boxes 5 and 6 indicate the year in which the earnings are taxable. Amended federal tax return 2011 See Instructions for Recipient on the back of copy B of your Form 1099-Q. Amended federal tax return 2011 Enter the amount of earnings on line 21 of Form 1040 (or Form 1040NR) for the applicable tax year. Amended federal tax return 2011 For more information, see Taxable Distributions , later. Amended federal tax return 2011   The excise tax does not apply to any rollover contribution. Amended federal tax return 2011 Note. Amended federal tax return 2011 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 federal tax return 2011 Example. Amended federal tax return 2011 In 2012, Greta's parents and grandparents contributed a total of $2,300 to Greta's Coverdell ESA— an excess contribution of $300. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 (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 federal tax return 2011 Figuring and reporting the additional tax. Amended federal tax return 2011   You figure this excise tax in Part V of Form 5329. Amended federal tax return 2011 Report the additional tax on Form 1040, line 58 (or Form 1040NR, line 56). Amended federal tax return 2011 Rollovers and Other Transfers Assets can be rolled over from one Coverdell ESA to another or the designated beneficiary can be changed. Amended federal tax return 2011 The beneficiary's interest can be transferred to a spouse or former spouse because of divorce. Amended federal tax return 2011 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 federal tax return 2011 This age limitation does not apply if the new beneficiary is a special needs beneficiary. Amended federal tax return 2011 An amount is rolled over if it is paid to another Coverdell ESA within 60 days after the date of the distribution. Amended federal tax return 2011 Do not report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. Amended federal tax return 2011 These are not taxable distributions. Amended federal tax return 2011 Members of the beneficiary's family. Amended federal tax return 2011   For these purposes, the beneficiary's family includes the beneficiary's spouse and the following other relatives of the beneficiary. Amended federal tax return 2011 Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them. Amended federal tax return 2011 Brother, sister, stepbrother, or stepsister. Amended federal tax return 2011 Father or mother or ancestor of either. Amended federal tax return 2011 Stepfather or stepmother. Amended federal tax return 2011 Son or daughter of a brother or sister. Amended federal tax return 2011 Brother or sister of father or mother. Amended federal tax return 2011 Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. Amended federal tax return 2011 The spouse of any individual listed above. Amended federal tax return 2011 First cousin. Amended federal tax return 2011 Example. Amended federal tax return 2011 When Aaron graduated from college last year he had $5,000 left in his Coverdell ESA. Amended federal tax return 2011 He wanted to give this money to his younger sister, who was still in high school. Amended federal tax return 2011 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 federal tax return 2011 Only one rollover per Coverdell ESA is allowed during the 12-month period ending on the date of the payment or distribution. Amended federal tax return 2011 This rule does not apply to the rollover of a military death gratuity or payment from Servicemembers' Group Life Insurance (SGLI). Amended federal tax return 2011 Military death gratuity. Amended federal tax return 2011   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 federal tax return 2011 Such payments are made to an eligible survivor upon the death of a member of the armed forces. Amended federal tax return 2011 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 federal tax return 2011   This rollover contribution is not subject to (but is in addition to) the contribution limits discussed earlier under Contribution Limits . Amended federal tax return 2011 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 federal tax return 2011   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 federal tax return 2011 See Distributions , later. Amended federal tax return 2011 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 federal tax return 2011 Changing the Designated Beneficiary The designated beneficiary can be changed. Amended federal tax return 2011 See Members of the beneficiary's family , earlier. Amended federal tax return 2011 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 federal tax return 2011 Example. Amended federal tax return 2011 Assume the same situation for Aaron as in the last example (see Rollovers , earlier). Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 After the transfer, the spouse or former spouse treats the Coverdell ESA as his or her own. Amended federal tax return 2011 Example. Amended federal tax return 2011 In their divorce settlement, Peg received her ex-husband's Coverdell ESA. Amended federal tax return 2011 In this process, the account was transferred into her name. Amended federal tax return 2011 Peg now treats the funds in this Coverdell ESA as if she were the original owner. Amended federal tax return 2011 Distributions The designated beneficiary of a Coverdell ESA can take a distribution at any time. Amended federal tax return 2011 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 federal tax return 2011 See Table 7-3, Coverdell ESA Distributions at a Glance, for highlights. Amended federal tax return 2011 Table 7-3. Amended federal tax return 2011 Coverdell ESA Distributions at a Glance Do not rely on this table alone. Amended federal tax return 2011 It provides only general highlights. Amended federal tax return 2011 See the text for definitions of terms in bold type and for more complete explanations. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Amounts must be distributed when the designated beneficiary reaches age 30, unless he or she is a special needs beneficiary. Amended federal tax return 2011 Also, certain transfers to members of the beneficiary's family are permitted. Amended federal tax return 2011 Does the designated beneficiary need to be enrolled for a minimum number of courses to take a tax-free distribution? No. Amended federal tax return 2011 Adjusted qualified education expenses. Amended federal tax return 2011   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 federal tax return 2011 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 federal tax return 2011 The amount you get by subtracting tax-free educational assistance from your total qualified education expenses is your adjusted qualified education expenses. Amended federal tax return 2011 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 federal tax return 2011 Do not report tax-free distributions (including qualifying rollovers) on your tax return. Amended federal tax return 2011 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 federal tax return 2011 Excess distribution. Amended federal tax return 2011   This is the part of the total distribution that is more than the beneficiary's adjusted qualified education expenses for the year. Amended federal tax return 2011 Earnings and basis. Amended federal tax return 2011   You will receive a Form 1099-Q for each of the Coverdell ESAs from which money was distributed in 2013. Amended federal tax return 2011 The amount of your gross distribution will be shown in box 1. Amended federal tax return 2011 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 federal tax return 2011 This will be shown in the blank box below boxes 5 and 6. Amended federal tax return 2011   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 federal tax return 2011 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 federal tax return 2011 Figure the taxable portion for 2013 as shown in the following steps. Amended federal tax return 2011 Multiply the total amount distributed by a fraction. Amended federal tax return 2011 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 federal tax return 2011 Subtract the amount figured in (1) from the total amount distributed during 2013. Amended federal tax return 2011 The result is the amount of earnings included in the distribution(s). Amended federal tax return 2011 Multiply the amount of earnings figured in (2) by a fraction. Amended federal tax return 2011 The numerator is the adjusted qualified education expenses paid during 2013 and the denominator is the total amount distributed during 2013. Amended federal tax return 2011 Subtract the amount figured in (3) from the amount figured in (2). Amended federal tax return 2011 The result is the amount the beneficiary must include in income. Amended federal tax return 2011 The taxable amount must be reported on Form 1040 or Form 1040NR, line 21. Amended federal tax return 2011 Example. Amended federal tax return 2011 You received an $850 distribution from your Coverdell ESA, to which $1,500 had been contributed before 2013. Amended federal tax return 2011 There were no contributions in 2013. Amended federal tax return 2011 This is your first distribution from the account, so your basis in the account on December 31, 2012, was $1,500. Amended federal tax return 2011 The value (balance) of your account on December 31, 2013, was $950. Amended federal tax return 2011 You had $700 of adjusted qualified education expenses (AQEE) for the year. Amended federal tax return 2011 Using the steps in Figuring the Taxable Portion of a Distribution , earlier, figure the taxable portion of your distribution as follows. Amended federal tax return 2011   1. Amended federal tax return 2011 $850 (distribution) × $1,500 basis + $0 contributions  $950 value + $850 distribution       =$708 (basis portion of distribution)     2. Amended federal tax return 2011 $850 (distribution)−$708 (basis portion of distribution)     =$142 (earnings included in distribution)   3. Amended federal tax return 2011 $142 (earnings) × $700 AQEE  $850 distribution           =$117 (tax-free earnings)     4. Amended federal tax return 2011 $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 federal tax return 2011 Report this amount on Form 1040, line 21, listing the type and amount of income on the dotted line. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Example. Amended federal tax return 2011 Derek Green had $5,800 of qualified higher education expenses for 2013, his first year in college. Amended federal tax return 2011 He paid his college expenses from the following sources. Amended federal tax return 2011     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 federal tax return 2011 Derek's parents claimed a $2,500 American opportunity credit (based on $4,000 expenses) on their tax return. Amended federal tax return 2011 Before Derek can determine the taxable portion of his Coverdell ESA distribution, he must reduce his total qualified higher education expenses. Amended federal tax return 2011     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 federal tax return 2011 The balance in Derek's account was $1,800 on December 31, 2013. Amended federal tax return 2011 Prior to 2013, $2,100 had been contributed to this account. Amended federal tax return 2011 Contributions for 2013 totaled $400. Amended federal tax return 2011 Using the four steps outlined earlier, Derek figures the taxable portion of his distribution as shown below. Amended federal tax return 2011   1. Amended federal tax return 2011 $1,000 (distribution) × $2,100 basis + $400 contributions  $1,800 value + $1,000 distribution           =$893 (basis portion of distribution)     2. Amended federal tax return 2011 $1,000 (distribution)−$893 (basis portion of distribution)     = $107 (earnings included in distribution)   3. Amended federal tax return 2011 $107 (earnings) × $300 AQHEE  $1,000 distribution       =$32 (tax-free earnings)     4. Amended federal tax return 2011 $107 (earnings)−$32 (tax-free earnings)=$75 (taxable earnings)                 Derek must include $75 in income (Form 1040, line 21). Amended federal tax return 2011 This is the amount of distributed earnings not used for adjusted qualified higher education expenses. Amended federal tax return 2011 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 federal tax return 2011 The following two examples illustrate possible allocations. Amended federal tax return 2011 Example 1. Amended federal tax return 2011 In 2013, Beatrice graduated from high school and began her first semester of college. Amended federal tax return 2011 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 federal tax return 2011 To pay these expenses, Beatrice withdrew $800 from her Coverdell ESA and $4,200 from her QTP. Amended federal tax return 2011 No one claimed Beatrice as a dependent, nor was she eligible for an education credit. Amended federal tax return 2011 She did not receive any tax-free educational assistance in 2013. Amended federal tax return 2011 Beatrice must allocate her total qualified education expenses between the two distributions. Amended federal tax return 2011 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 federal tax return 2011 The qualified expenses are greater than the distribution, making the $800 Coverdell ESA distribution tax free. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Finally, Beatrice figures the taxable and tax-free portions of her QTP distribution based on her $3,000 of QHEE. Amended federal tax return 2011 (See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program for more information. Amended federal tax return 2011 ) Example 2. Amended federal tax return 2011 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 federal tax return 2011 In this case, she allocates her qualified education expenses as follows. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011   $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 federal tax return 2011 See Figuring the Taxable Portion of a Distribution , earlier, in this chapter. Amended federal tax return 2011   QTP distribution based on her $2,400 of QHEE (see Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program). Amended federal tax return 2011 The above examples show two types of allocation between distributions from a Coverdell ESA and a QTP. Amended federal tax return 2011 However, you do not have to allocate your expenses in the same way. Amended federal tax return 2011 You can use any reasonable method. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Your basis is the total amount of contributions to that Coverdell ESA. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 ) from all such accounts in order to determine your taxable earnings for the year. Amended federal tax return 2011 By doing this, the loss from one ESA account reduces the distributed earnings (if any) from any other ESA account. Amended federal tax return 2011 For examples of the calculation, see Losses on QTP Investments in chapter 8, Qualified Tuition Program. Amended federal tax return 2011 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 federal tax return 2011 Exceptions. Amended federal tax return 2011   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 federal tax return 2011 Made because the designated beneficiary is disabled. Amended federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 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 federal tax return 2011 Made on account of the attendance of the designated beneficiary at a U. Amended federal tax return 2011 S. Amended federal tax return 2011 military academy (such as the USMA at West Point). Amended federal tax return 2011 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 federal tax return 2011 S. Amended federal tax return 2011 Code) attributable to such attendance. Amended federal tax return 2011 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 federal tax return 2011 Made before June 1, 2014, of an excess 2013 contribution (and any earnings on it). Amended federal tax return 2011 The distributed earnings must be included in gross income for the year in which the excess contribution was made. Amended federal tax return 2011 Exception (3) applies only to the extent the distribution is not more than the scholarship, allowance, or payment. Amended federal tax return 2011 Figuring the additional tax. Amended federal tax return 2011    Use Part II of Form 5329, to figure any additional tax. Amended federal tax return 2011 Report the amount on Form 1040, line 58, or Form 1040NR, line 56. Amended federal tax return 2011 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 federal tax return 2011 The designated beneficiary reaches age 30. Amended federal tax return 2011 In this case, the remaining assets must be distributed within 30 days after the beneficiary reaches age 30. Amended federal tax return 2011 However, this rule does not apply if the beneficiary is a special needs beneficiary. Amended federal tax return 2011 The designated beneficiary dies before reaching age 30. Amended federal tax return 2011 In this case, the remaining assets must generally be distributed within 30 days after the date of death. Amended federal tax return 2011 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 federal tax return 2011 (“Family member” was defined earlier under Rollovers . Amended federal tax return 2011 ) 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 federal tax return 2011 This age limitation does not apply if the new beneficiary is a special needs beneficiary. Amended federal tax return 2011 There are no tax consequences as a result of the transfer. Amended federal tax return 2011 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 federal tax return 2011 You determine these earnings as shown in the following two steps. Amended federal tax return 2011 Multiply the amount distributed by a fraction. Amended federal tax return 2011 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 federal tax return 2011 Subtract the amount figured in (1) from the total amount distributed during 2013. Amended federal tax return 2011 The result is the amount of earnings included in the distribution. Amended federal tax return 2011 For an example, see steps (1) and (2) of the Example under Figuring the Taxable Portion of a Distribution, earlier. Amended federal tax return 2011 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 federal tax return 2011 Worksheet 7-3 Instructions. Amended federal tax return 2011 Coverdell ESA—Taxable Distributions and Basis Line G. Amended federal tax return 2011 Enter the total distributions received from all Coverdell ESAs during 2013. Amended federal tax return 2011 Do not include amounts rolled over to another ESA within 60 days (only one rollover is allowed during any 12-month period). Amended federal tax return 2011 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 federal tax return 2011 Line 2. Amended federal tax return 2011 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 federal tax return 2011   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 federal tax return 2011 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 federal tax return 2011 For years after 2001, you can find that amount by using the ending basis from the worksheet in Publication 970 for that year. Amended federal tax return 2011 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 federal tax return 2011 Line 4. Amended federal tax return 2011 Enter the total distributions received from this Coverdell ESA in 2013. Amended federal tax return 2011 Do not include amounts rolled over to another Coverdell ESA within 60 days (only one rollover is allowed during any 12-month period). Amended federal tax return 2011   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 federal tax return 2011 Line 7. Amended federal tax return 2011 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 federal tax return 2011 A statement should be sent to you by January 31, 2014, for this Coverdell ESA showing the value on December 31, 2013. Amended federal tax return 2011   A rollover is a tax-free withdrawal from one Coverdell ESA that is contributed to another Coverdell ESA. Amended federal tax return 2011 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 federal tax return 2011 Worksheet 7-3. Amended federal tax return 2011 Coverdell ESA—Taxable Distributions and Basis How to complete this worksheet. Amended federal tax return 2011 • • • Complete Part I, lines A through H, on only one worksheet. Amended federal tax return 2011  Complete a separate Part II, lines 1 through 15, for each of your Coverdell ESAs. Amended federal tax return 2011  Complete Part III, the Summary (line 16), on only one worksheet. Amended federal tax return 2011 Part I. Amended federal tax return 2011 Qualified Education Expenses (Complete for total expenses)       A. Amended federal tax return 2011 Enter your total qualified education expenses for 2013   A. Amended federal tax return 2011   B. Amended federal tax return 2011 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 federal tax return 2011         C. Amended federal tax return 2011 Enter those qualified higher education expenses deducted on Schedule C or C-EZ (Form 1040). Amended federal tax return 2011 Schedule F (Form 1040), or as a miscellaneous itemized deduction on Schedule A (Form 1040 or 1040NR)   C. Amended federal tax return 2011         D. Amended federal tax return 2011 Enter those qualified higher education expenses on which  an American opportunity or lifetime learning credit was based   D. Amended federal tax return 2011         E. Amended federal tax return 2011 Add lines B, C, and D   D. Amended federal tax return 2011   F. Amended federal tax return 2011 Subtract line E from line A. Amended federal tax return 2011 This is your adjusted qualified education expense for 2013   E. Amended federal tax return 2011   G. Amended federal tax return 2011 Enter your total distributions from all Coverdell ESAs during 2013. Amended federal tax return 2011 Do not include rollovers  or the return of excess contributions (see instructions)   F. Amended federal tax return 2011   H. Amended federal tax return 2011 Divide line F by line G. Amended federal tax return 2011 Enter the result as a decimal (rounded to at least 3 places). Amended federal tax return 2011 If the  result is 1. Amended federal tax return 2011 000 or more, enter 1. Amended federal tax return 2011 000   G. Amended federal tax return 2011 . Amended federal tax return 2011 Part II. Amended federal tax return 2011 Taxable Distributions and Basis (Complete separately for each account) 1. Amended federal tax return 2011 Enter the amount contributed to this Coverdell ESA for 2013, including contributions made for 2013 from January 1, 2014, through April 15, 2014. Amended federal tax return 2011 Do not include rollovers or the return of excess contributions   1. Amended federal tax return 2011   2. Amended federal tax return 2011 Enter your basis in this Coverdell ESA as of December 31, 2012 (see instructions)   2. Amended federal tax return 2011   3. Amended federal tax return 2011 Add lines 1 and 2   3. Amended federal tax return 2011   4. Amended federal tax return 2011 Enter the total distributions from this Coverdell ESA during 2013. Amended federal tax return 2011 Do not include rollovers  or the return of excess contributions (see instructions)   4. Amended federal tax return 2011   5. Amended federal tax return 2011 Multiply line 4 by line H. Amended federal tax return 2011 This is the amount of adjusted qualified  education expense attributable to this Coverdell ESA   5. Amended federal tax return 2011         6. Amended federal tax return 2011 Subtract line 5 from line 4   6. Amended federal tax return 2011         7. Amended federal tax return 2011 Enter the total value of this Coverdell ESA as of December 31, 2013,  plus any outstanding rollovers (see instructions)   7. Amended federal tax return 2011         8. Amended federal tax return 2011 Add lines 4 and 7   8. Amended federal tax return 2011         9. Amended federal tax return 2011 Divide line 3 by line 8. Amended federal tax return 2011 Enter the result as a decimal (rounded to  at least 3 places). Amended federal tax return 2011 If the result is 1. Amended federal tax return 2011 000 or more, enter 1. Amended federal tax return 2011 000   9. Amended federal tax return 2011 . Amended federal tax return 2011       10. Amended federal tax return 2011 Multiply line 4 by line 9. Amended federal tax return 2011 This is the amount of basis allocated to your  distributions, and is tax free   10. Amended federal tax return 2011     Note. Amended federal tax return 2011 If line 6 is zero, skip lines 11 through 13, enter -0- on line 14, and go to line 15. Amended federal tax return 2011       11. Amended federal tax return 2011 Subtract line 10 from line 4   11. Amended federal tax return 2011   12. Amended federal tax return 2011 Divide line 5 by line 4. Amended federal tax return 2011 Enter the result as a decimal (rounded to  at least 3 places). Amended federal tax return 2011 If the result is 1. Amended federal tax return 2011 000 or more, enter 1. Amended federal tax return 2011 000   12. Amended federal tax return 2011 . Amended federal tax return 2011       13. Amended federal tax return 2011 Multiply line 11 by line 12. Amended federal tax return 2011 This is the amount of qualified education  expenses allocated to your distributions, and is tax free   13. Amended federal tax return 2011   14. Amended federal tax return 2011 Subtract line 13 from line 11. Amended federal tax return 2011 This is the portion of the distributions from this  Coverdell ESA in 2013 that you must include in income   14. Amended federal tax return 2011   15. Amended federal tax return 2011 Subtract line 10 from line 3. Amended federal tax return 2011 This is your basis in this Coverdell ESA as of December 31, 2013   15. Amended federal tax return 2011   Part III. Amended federal tax return 2011 Summary (Complete only once)       16. Amended federal tax return 2011 Taxable amount. Amended federal tax return 2011 Add together all amounts on line 14 for all your Coverdell ESAs. Amended federal tax return 2011 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 federal tax return 2011   Prev  Up  Next   Home   More Online Publications
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U.S. Commodity Futures Trading Commission (CFTC)

The mission of the CFTC is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets. In pursuit of its mission, the CFTC investigates and prosecutes commodities fraud, including foreign currency schemes, energy manipulation and hedge fund fraud, and works with other federal and state agencies to bring criminal and other actions. The CFTC also engages in public education and outreach by participating in consumer groups and issuing Consumer Advisories and other educational materials.

Contact the Agency or Department

Website: U.S. Commodity Futures Trading Commission (CFTC)

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Address: Three Lafayette Center
1155 21st St., NW

Washington, DC 20581

Phone Number: (202) 418-5000

TTY: (202) 418-5514

The Amended Federal Tax Return 2011

Amended federal tax return 2011 Publication 525 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionAssignment of income. Amended federal tax return 2011 Ordering forms and publications. Amended federal tax return 2011 Tax questions. Amended federal tax return 2011 Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 525, such as legislation enacted after it was published, go to www. Amended federal tax return 2011 irs. Amended federal tax return 2011 gov/pub525. Amended federal tax return 2011 What's New Health flexible spending arrangements (health FSAs) under cafeteria plans. Amended federal tax return 2011  For plan years beginning after 2012, health FSAs are subject to a $2,500 limit on salary reduction contributions. Amended federal tax return 2011 For plan years beginning after 2013, the $2,500 limit is subject to an inflation adjustment. Amended federal tax return 2011 Itemized deduction for medical expenses. Amended federal tax return 2011  Beginning in 2013, an itemized deduction is generally allowed for uncompensated medical expenses that exceed 10% of adjusted gross income (AGI). Amended federal tax return 2011 If an individual or an individual’s spouse was born before January 2, 1949, the deduction is allowed for expenses that exceed 7. Amended federal tax return 2011 5% of AGI. Amended federal tax return 2011 Additional Medicare Tax. Amended federal tax return 2011  Beginning in 2013, a 0. Amended federal tax return 2011 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). Amended federal tax return 2011 For more information, see Form 8959 and its instructions. Amended federal tax return 2011 Net Investment Income Tax (NIIT). Amended federal tax return 2011  Beginning in 2013, the NIIT applies at a rate of 3. Amended federal tax return 2011 8% to certain net investment income of individuals, estates and trusts that have income above the threshold amounts. Amended federal tax return 2011 Individuals will owe the tax if they have net investment income and also have modified adjusted gross income over the following thresholds for their filing status: Married filing jointly, $250,000; Married filing separately, $125,000; Single, $200,000; Head of household (with qualifying person), $200,000; Qualifying widow(er) with dependent child, $250,000. Amended federal tax return 2011 For more information, see Form 8960 and its instructions. Amended federal tax return 2011 Reminders Terrorist attacks. Amended federal tax return 2011  You can exclude from income certain disaster assistance, disability, and death payments received as a result of a terrorist or military action. Amended federal tax return 2011 For more information, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Amended federal tax return 2011 Gulf oil spill. Amended federal tax return 2011  You are required to include in your gross income payments you received for lost wages, lost business income, or lost profits. Amended federal tax return 2011 See Gulf oil spill under Other Income, later. Amended federal tax return 2011 Qualified settlement income. Amended federal tax return 2011 . Amended federal tax return 2011  If you are a qualified taxpayer, you can contribute all or part of your qualified settlement income, up to $100,000, to an eligible retirement plan, including an IRA. Amended federal tax return 2011 Contributions to eligible retirement plans, other than a Roth IRA or a designated Roth contribution, reduce the qualified settlement income that you must include in income. Amended federal tax return 2011 See Exxon Valdez settlement income under Other Income, later. Amended federal tax return 2011 Foreign income. Amended federal tax return 2011  If you are a U. Amended federal tax return 2011 S. Amended federal tax return 2011 citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. Amended federal tax return 2011 S. Amended federal tax return 2011 law. Amended federal tax return 2011 This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. Amended federal tax return 2011 This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). Amended federal tax return 2011 If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. Amended federal tax return 2011 For details, see Publication 54, Tax Guide for U. Amended federal tax return 2011 S. Amended federal tax return 2011 Citizens and Resident Aliens Abroad. Amended federal tax return 2011 Disaster mitigation payments. Amended federal tax return 2011 . Amended federal tax return 2011  You can exclude from income grants you use to mitigate (reduce the severity of) potential damage from future natural disasters that are paid to you through state and local governments. Amended federal tax return 2011 For more information, see Disaster mitigation payments under Welfare and Other Public Assistance Benefits, later. Amended federal tax return 2011 Qualified joint venture. Amended federal tax return 2011  A qualified joint venture conducted by you and your spouse may not be treated as a partnership if you file a joint return for the tax year. Amended federal tax return 2011 See Partnership Income under Business and Investment Income, later. Amended federal tax return 2011 Photographs of missing children. Amended federal tax return 2011  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Amended federal tax return 2011 Photographs of missing children selected by the Center may appear in this publication on pages that otherwise would be blank. Amended federal tax return 2011 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. Amended federal tax return 2011 Introduction You can receive income in the form of money, property, or services. Amended federal tax return 2011 This publication discusses many kinds of income and explains whether they are taxable or nontaxable. Amended federal tax return 2011 It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. Amended federal tax return 2011 It also includes information on disability pensions, life insurance proceeds, and welfare and other public assistance benefits. Amended federal tax return 2011 Check the index for the location of a specific subject. Amended federal tax return 2011 In most cases, an amount included in your income is taxable unless it is specifically exempted by law. Amended federal tax return 2011 Income that is taxable must be reported on your return and is subject to tax. Amended federal tax return 2011 Income that is nontaxable may have to be shown on your tax return but is not taxable. Amended federal tax return 2011 Constructively received income. Amended federal tax return 2011   You are generally taxed on income that is available to you, regardless of whether it is actually in your possession. Amended federal tax return 2011    A valid check that you received or that was made available to you before the end of the tax year is considered income constructively received in that year, even if you do not cash the check or deposit it to your account until the next year. Amended federal tax return 2011 For example, if the postal service tries to deliver a check to you on the last day of the tax year but you are not at home to receive it, you must include the amount in your income for that tax year. Amended federal tax return 2011 If the check was mailed so that it could not possibly reach you until after the end of the tax year, and you otherwise could not get the funds before the end of the year, you include the amount in your income for the next tax year. Amended federal tax return 2011 Assignment of income. Amended federal tax return 2011   Income received by an agent for you is income you constructively received in the year the agent received it. Amended federal tax return 2011 If you agree by contract that a third party is to receive income for you, you must include the amount in your income when the third party receives it. Amended federal tax return 2011 Example. Amended federal tax return 2011 You and your employer agree that part of your salary is to be paid directly to one of your creditors. Amended federal tax return 2011 You must include that amount in your income when your creditor receives it. Amended federal tax return 2011 Prepaid income. Amended federal tax return 2011   In most cases, prepaid income, such as compensation for future services, is included in your income in the year you receive it. Amended federal tax return 2011 However, if you use an accrual method of accounting, you can defer prepaid income you receive for services to be performed before the end of the next tax year. Amended federal tax return 2011 In this case, you include the payment in your income as you earn it by performing the services. Amended federal tax return 2011 Comments and suggestions. Amended federal tax return 2011   We welcome your comments about this publication and your suggestions for future editions. Amended federal tax return 2011   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Amended federal tax return 2011 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Amended federal tax return 2011 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Amended federal tax return 2011   You can send your comments from www. Amended federal tax return 2011 irs. Amended federal tax return 2011 gov/formspubs/. Amended federal tax return 2011 Click on “More Information” and then on “Comment on Tax Forms and Publications. Amended federal tax return 2011 ”   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. Amended federal tax return 2011 Ordering forms and publications. Amended federal tax return 2011   Visit www. Amended federal tax return 2011 irs. Amended federal tax return 2011 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. Amended federal tax return 2011 Internal Revenue Service 1201 N. Amended federal tax return 2011 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Amended federal tax return 2011   If you have a tax question, check the information available on IRS. Amended federal tax return 2011 gov or call 1-800-829-1040. Amended federal tax return 2011 We cannot answer tax questions sent to either of the above addresses. Amended federal tax return 2011 Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 527 Residential Rental Property 541 Partnerships 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 559 Survivors, Executors, and Administrators 575 Pension and Annuity Income 915 Social Security and Equivalent Railroad Retirement Benefits 970 Tax Benefits for Education 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) 1040 U. Amended federal tax return 2011 S. Amended federal tax return 2011 Individual Income Tax Return 1040A U. Amended federal tax return 2011 S. Amended federal tax return 2011 Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Amended federal tax return 2011 S. Amended federal tax return 2011 Nonresident Alien Income Tax Return 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Amended federal tax return 2011 W-2 Wage and Tax Statement  See How To Get Tax Help , near the end of this publication, for information about getting these publications. Amended federal tax return 2011 Prev  Up  Next   Home   More Online Publications