Our daughter (no pics) is starting college next fall. I was going to close a Coverdale college account to pay for tuition. Is there anything I have to do to prove the funds are for education? The account is through etrade. Is this something I have to put on my taxes? Her taxes?

2 ...

Report Post

Posted by Shepherd88

Member since Dec 2013

4891 posts

Posted on 9/8/23 at 10:04 am to Motownsix

Can you not send the funds directly from the account to the school?

1 ...

Report Post

Posted by Motownsix

Boise

Member since Oct 2022

3143 posts

Posted on 9/8/23 at 10:34 am to Shepherd88

I guess I could send the funds to the school? Is that the extent of the obligation on my part to establish the funds were used for educational purposes? Is this on the honor system? Is there a tax form I need to fill out? I was sure someone would have some experience with this.

1 ...

Report Post

Posted by Shepherd88

Member since Dec 2013

4891 posts

Posted on 9/8/23 at 10:37 am to Motownsix

Whatever platform you’re using should ask you where the funds are going to upon distribution (owner, beneficiary, or school). The 1099 will be reported according to your answer.
I’d keep all your documentation however and review with your CPA to make sure it’s all accounted for and correctly documented.

0 ...

Report Post

Posted by makersmark1

earth

Member since Oct 2011

20454 posts

Posted on 9/8/23 at 1:28 pm to Motownsix

The school should send you a 1098T.

If it exceeds the money withdrawn, you are fine.

Also you get “cost of attendance” that each school should have available at their website.

I sent this stuff to my accountant each time I withdrew.
I transferred the remainder into 529; it has more flexibility.

Did not have to pay tax on the distributions since they were bonafide educational expenses.

This post was edited on 9/8/23 at 1:31 pm

Page 1