PART VIII—HIGHER EDUCATION SAVINGS ENTITIES
Amendments
2004—
2001—
1997—
§529. Qualified tuition programs
(a) General rule
A qualified tuition program shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, such program shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).
(b) Qualified tuition program
For purposes of this section—
(1) In general
The term "qualified tuition program" means a program established and maintained by a State or agency or instrumentality thereof or by 1 or more eligible educational institutions—
(A) under which a person—
(i) may purchase tuition credits or certificates on behalf of a designated beneficiary which entitle the beneficiary to the waiver or payment of qualified higher education expenses of the beneficiary, or
(ii) in the case of a program established and maintained by a State or agency or instrumentality thereof, may make contributions to an account which is established for the purpose of meeting the qualified higher education expenses of the designated beneficiary of the account, and
(B) which meets the other requirements of this subsection.
Except to the extent provided in regulations, a program established and maintained by 1 or more eligible educational institutions shall not be treated as a qualified tuition program unless such program provides that amounts are held in a qualified trust and such program has received a ruling or determination that such program meets the applicable requirements for a qualified tuition program. For purposes of the preceding sentence, the term "qualified trust" means a trust which is created or organized in the United States for the exclusive benefit of designated beneficiaries and with respect to which the requirements of paragraphs (2) and (5) of section 408(a) are met.
(2) Cash contributions
A program shall not be treated as a qualified tuition program unless it provides that purchases or contributions may only be made in cash.
(3) Separate accounting
A program shall not be treated as a qualified tuition program unless it provides separate accounting for each designated beneficiary.
(4) No investment direction
A program shall not be treated as a qualified tuition program unless it provides that any contributor to, or designated beneficiary under, such program may not directly or indirectly direct the investment of any contributions to the program (or any earnings thereon).
(5) No pledging of interest as security
A program shall not be treated as a qualified tuition program if it allows any interest in the program or any portion thereof to be used as security for a loan.
(6) Prohibition on excess contributions
A program shall not be treated as a qualified tuition program unless it provides adequate safeguards to prevent contributions on behalf of a designated beneficiary in excess of those necessary to provide for the qualified higher education expenses of the beneficiary.
(c) Tax treatment of designated beneficiaries and contributors
(1) In general
Except as otherwise provided in this subsection, no amount shall be includible in gross income of—
(A) a designated beneficiary under a qualified tuition program, or
(B) a contributor to such program on behalf of a designated beneficiary,
with respect to any distribution or earnings under such program.
(2) Gift tax treatment of contributions
For purposes of chapters 12 and 13—
(A) In general
Any contribution to a qualified tuition program on behalf of any designated beneficiary—
(i) shall be treated as a completed gift to such beneficiary which is not a future interest in property, and
(ii) shall not be treated as a qualified transfer under section 2503(e).
(B) Treatment of excess contributions
If the aggregate amount of contributions described in subparagraph (A) during the calendar year by a donor exceeds the limitation for such year under section 2503(b), such aggregate amount shall, at the election of the donor, be taken into account for purposes of such section ratably over the 5-year period beginning with such calendar year.
(3) Distributions
(A) In general
Any distribution under a qualified tuition program shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter.
(B) Distributions for qualified higher education expenses
For purposes of this paragraph—
(i) In-kind distributions
No amount shall be includible in gross income under subparagraph (A) by reason of a distribution which consists of providing a benefit to the distributee which, if paid for by the distributee, would constitute payment of a qualified higher education expense.
(ii) Cash distributions
In the case of distributions not described in clause (i), if—
(I) such distributions do not exceed the qualified higher education expenses (reduced by expenses described in clause (i)), no amount shall be includible in gross income, and
(II) in any other case, the amount otherwise includible in gross income shall be reduced by an amount which bears the same ratio to such amount as such expenses bear to such distributions.
(iii) Exception for institutional programs
In the case of any taxable year beginning before January 1, 2004, clauses (i) and (ii) shall not apply with respect to any distribution during such taxable year under a qualified tuition program established and maintained by 1 or more eligible educational institutions.
(iv) Treatment as distributions
Any benefit furnished to a designated beneficiary under a qualified tuition program shall be treated as a distribution to the beneficiary for purposes of this paragraph.
(v) Coordination with Hope and Lifetime Learning credits
The total amount of qualified higher education expenses with respect to an individual for the taxable year shall be reduced—
(I) as provided in section 25A(g)(2), and
(II) by the amount of such expenses which were taken into account in determining the credit allowed to the taxpayer or any other person under section 25A.
(vi) Coordination with Coverdell education savings accounts
If, with respect to an individual for any taxable year—
(I) the aggregate distributions to which clauses (i) and (ii) and section 530(d)(2)(A) apply, exceed
(II) the total amount of qualified higher education expenses otherwise taken into account under clauses (i) and (ii) (after the application of clause (v)) for such year,
the taxpayer shall allocate such expenses among such distributions for purposes of determining the amount of the exclusion under clauses (i) and (ii) and section 530(d)(2)(A).
(C) Change in beneficiaries or programs
(i) Rollovers
Subparagraph (A) shall not apply to that portion of any distribution which, within 60 days of such distribution, is transferred—
(I) to another qualified tuition program for the benefit of the designated beneficiary, or
(II) to the credit of another designated beneficiary under a qualified tuition program who is a member of the family of the designated beneficiary with respect to which the distribution was made.
(ii) Change in designated beneficiaries
Any change in the designated beneficiary of an interest in a qualified tuition program shall not be treated as a distribution for purposes of subparagraph (A) if the new beneficiary is a member of the family of the old beneficiary.
(iii) Limitation on certain rollovers
Clause (i)(I) shall not apply to any transfer if such transfer occurs within 12 months from the date of a previous transfer to any qualified tuition program for the benefit of the designated beneficiary.
(D) Operating rules
For purposes of applying section 72—
(i) to the extent provided by the Secretary, all qualified tuition programs of which an individual is a designated beneficiary shall be treated as one program,
(ii) except to the extent provided by the Secretary, all distributions during a taxable year shall be treated as one distribution, and
(iii) except to the extent provided by the Secretary, the value of the contract, income on the contract, and investment in the contract shall be computed as of the close of the calendar year in which the taxable year begins.
(4) Estate tax treatment
(A) In general
No amount shall be includible in the gross estate of any individual for purposes of
(B) Amounts includible in estate of designated beneficiary in certain cases
Subparagraph (A) shall not apply to amounts distributed on account of the death of a beneficiary.
(C) Amounts includible in estate of donor making excess contributions
In the case of a donor who makes the election described in paragraph (2)(B) and who dies before the close of the 5-year period referred to in such paragraph, notwithstanding subparagraph (A), the gross estate of the donor shall include the portion of such contributions properly allocable to periods after the date of death of the donor.
(5) Other gift tax rules
For purposes of chapters 12 and 13—
(A) Treatment of distributions
Except as provided in subparagraph (B), in no event shall a distribution from a qualified tuition program be treated as a taxable gift.
(B) Treatment of designation of new beneficiary
The taxes imposed by chapters 12 and 13 shall apply to a transfer by reason of a change in the designated beneficiary under the program (or a rollover to the account of a new beneficiary) unless the new beneficiary is—
(i) assigned to the same generation as (or a higher generation than) the old beneficiary (determined in accordance with section 2651), and
(ii) a member of the family of the old beneficiary.
(6) Additional tax
The tax imposed by section 530(d)(4) shall apply to any payment or distribution from a qualified tuition program in the same manner as such tax applies to a payment or distribution from an 1 Coverdell education savings account. This paragraph shall not apply to any payment or distribution in any taxable year beginning before January 1, 2004, which is includible in gross income but used for qualified higher education expenses of the designated beneficiary.
(d) Reports
Each officer or employee having control of the qualified tuition program or their designee shall make such reports regarding such program to the Secretary and to designated beneficiaries with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary.
(e) Other definitions and special rules
For purposes of this section—
(1) Designated beneficiary
The term "designated beneficiary" means—
(A) the individual designated at the commencement of participation in the qualified tuition program as the beneficiary of amounts paid (or to be paid) to the program,
(B) in the case of a change in beneficiaries described in subsection (c)(3)(C), the individual who is the new beneficiary, and
(C) in the case of an interest in a qualified tuition program purchased by a State or local government (or agency or instrumentality thereof) or an organization described in section 501(c)(3) and exempt from taxation under section 501(a) as part of a scholarship program operated by such government or organization, the individual receiving such interest as a scholarship.
(2) Member of family
The term "member of the family" means, with respect to any designated beneficiary—
(A) the spouse of such beneficiary;
(B) an individual who bears a relationship to such beneficiary which is described in subparagraphs (A) through (G) of section 152(d)(2);
(C) the spouse of any individual described in subparagraph (B); and
(D) any first cousin of such beneficiary.
(3) Qualified higher education expenses
(A) In general
The term "qualified higher education expenses" means—
(i) tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution;
(ii) expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance 2
(iii) expenses paid or incurred in 2009 or 2010 for the purchase of any computer technology or equipment (as defined in section 170(e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution.
Clause (iii) shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.
(B) Room and board included for students who are at least half-time
(i) In general
In the case of an individual who is an eligible student (as defined in section 25A(b)(3)) for any academic period, such term shall also include reasonable costs for such period (as determined under the qualified tuition program) incurred by the designated beneficiary for room and board while attending such institution. For purposes of subsection (b)(6), a designated beneficiary shall be treated as meeting the requirements of this clause.
(ii) Limitation
The amount treated as qualified higher education expenses by reason of clause (i) shall not exceed—
(I) the allowance (applicable to the student) for room and board included in the cost of attendance (as defined in section 472 of the Higher Education Act of 1965 (
(II) if greater, the actual invoice amount the student residing in housing owned or operated by the eligible educational institution is charged by such institution for room and board costs for such period.
(4) Application of section 514
An interest in a qualified tuition program shall not be treated as debt for purposes of section 514.
(5) Eligible educational institution
The term "eligible educational institution" means an institution—
(A) which is described in section 481 of the Higher Education Act of 1965 (
(B) which is eligible to participate in a program under title IV of such Act.
(f) Regulations
Notwithstanding any other provision of this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section and to prevent abuse of such purposes, including regulations under chapters 11, 12, and 13 of this title.
(Added
References in Text
The date of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001, referred to in subsec. (e)(3)(B)(ii)(I), is the date of enactment of
The date of the enactment of this paragraph, referred to in subsec. (e)(5)(A), probably means the date of enactment of
The Higher Education Act of 1965, referred to in subsec. (e)(5), is
Amendments
2009—Subsec. (e)(3)(A).
2006—Subsec. (f).
2005—Subsec. (c)(6).
2004—Subsec. (c)(5)(B).
Subsec. (e)(2)(B).
2002—Subsec. (e)(3)(B)(i).
2001—
Subsec. (a).
Subsec. (b).
Subsec. (b)(1).
Subsec. (b)(1)(A)(ii).
Subsec. (b)(2).
Subsec. (b)(3) to (7).
"(A) used for qualified higher education expenses of the designated beneficiary,
"(B) made on account of the death or disability of the designated beneficiary, or
"(C) made on account of a scholarship (or allowance or payment described in section 135(d)(1)(B) or (C)) received by the designated beneficiary to the extent the amount of the refund does not exceed the amount of the scholarship, allowance, or payment."
Subsec. (c)(1)(A), (3)(A).
Subsec. (c)(3)(B).
Subsec. (c)(3)(B)(vi).
Subsec. (c)(3)(C).
Subsec. (c)(3)(C)(i).
Subsec. (c)(3)(C)(ii).
Subsec. (c)(3)(C)(iii).
Subsec. (c)(3)(D)(i).
Subsec. (c)(3)(D)(ii).
Subsec. (c)(3)(D)(iii).
Subsec. (c)(6).
Subsecs. (d), (e)(1)(A), (C).
Subsec. (e)(2)(D).
Subsec. (e)(3)(A).
Subsec. (e)(3)(B)(i).
Subsec. (e)(3)(B)(ii).
Subsec. (e)(4).
2000—Subsec. (e)(3)(B).
1998—Subsec. (c)(3)(A).
Subsec. (e)(2).
"(A) an individual who bears a relationship to another individual which is a relationship described in paragraphs (1) through (8) of section 152(a), and
"(B) the spouse of any individual described in subparagraph (A)."
1997—Subsec. (b)(5).
Subsec. (c)(2).
Subsec. (c)(3)(A).
Subsec. (c)(4).
Subsec. (c)(5).
Subsec. (d).
"(d)
"(1)
"(2) Timing of reports.—Any report required by this subsection—
"(A) shall be filed at such time and in such matter as the Secretary prescribes, and
"(B) shall be furnished to individuals not later than January 31 of the calendar year following the calendar year to which such report relates."
Subsec. (e)(1)(B).
Subsec. (e)(1)(C).
Subsec. (e)(2).
Subsec. (e)(3).
Subsec. (e)(5).
Effective Date of 2009 Amendment
Effective Date of 2004 Amendment
Amendment by section 207(21) of
Amendment by section 406(a) of
Effective Date of 2001 Amendments
Amendment by
Amendment by
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1997 Amendment
Section 211(f) of
"(1)
"(2)
"(3)
"(4)
"(5)
"(A)
"(B)
"(6)
Amendment by section 1601(h)(1)(A), (B) of
Effective Date
Section 1806(c) of
"(1)
"(2)
"(A) a State or agency or instrumentality thereof maintains, on the date of the enactment of this Act, a program under which persons may purchase tuition credits or certificates on behalf of, or make contributions for education expenses of, a designated beneficiary, and
"(B) such program meets the requirements of a qualified State tuition program before the later of—
"(i) the date which is 1 year after such date of enactment, or
"(ii) the first day of the first calendar quarter after the close of the first regular session of the State legislature that begins after such date of enactment,
then such program (as in effect on August 20, 1996) shall be treated as a qualified State tuition program with respect to contributions (and earnings allocable thereto) pursuant to contracts entered into under such program before the first date on which such program meets such requirements (determined without regard to this paragraph) and the provisions of such program (as so in effect) shall apply in lieu of section 529(b) of the Internal Revenue Code of 1986 with respect to such contributions and earnings.
For purposes of subparagraph (B)(ii), if a State has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature."
1 So in original. Probably should be "a".
2 So in original. Probably should be followed by "; and".
§530. Coverdell education savings accounts
(a) General rule
A Coverdell education savings account shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, the Coverdell education savings account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).
(b) Definitions and special rules
For purposes of this section—
(1) Coverdell education savings account
The term "Coverdell education savings account" means a trust created or organized in the United States exclusively for the purpose of paying the qualified education expenses of an individual who is the designated beneficiary of the trust (and designated as a Coverdell education savings account at the time created or organized), but only if the written governing instrument creating the trust meets the following requirements:
(A) No contribution will be accepted—
(i) unless it is in cash,
(ii) after the date on which such beneficiary attains age 18, or
(iii) except in the case of rollover contributions, if such contribution would result in aggregate contributions for the taxable year exceeding $2,000.
(B) The trustee is a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section or who has so demonstrated with respect to any individual retirement plan.
(C) No part of the trust assets will be invested in life insurance contracts.
(D) The assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund.
(E) Except as provided in subsection (d)(7), any balance to the credit of the designated beneficiary on the date on which the beneficiary attains age 30 shall be distributed within 30 days after such date to the beneficiary or, if the beneficiary dies before attaining age 30, shall be distributed within 30 days after the date of death of such beneficiary.
The age limitations in subparagraphs (A)(ii) and (E), and paragraphs (5) and (6) of subsection (d), shall not apply to any designated beneficiary with special needs (as determined under regulations prescribed by the Secretary).
(2) Qualified education expenses
(A) In general
The term "qualified education expenses" means—
(i) qualified higher education expenses (as defined in section 529(e)(3)), and
(ii) qualified elementary and secondary education expenses (as defined in paragraph (3)).
(B) Qualified tuition programs
Such term shall include any contribution to a qualified tuition program (as defined in section 529(b)) on behalf of the designated beneficiary (as defined in section 529(e)(1)); but there shall be no increase in the investment in the contract for purposes of applying section 72 by reason of any portion of such contribution which is not includible in gross income by reason of subsection (d)(2).
(3) Qualified elementary and secondary education expenses
(A) In general
The term "qualified elementary and secondary education expenses" means—
(i) expenses for tuition, fees, academic tutoring, special needs services in the case of a special needs beneficiary, books, supplies, and other equipment which are incurred in connection with the enrollment or attendance of the designated beneficiary of the trust as an elementary or secondary school student at a public, private, or religious school,
(ii) expenses for room and board, uniforms, transportation, and supplementary items and services (including extended day programs) which are required or provided by a public, private, or religious school in connection with such enrollment or attendance, and
(iii) expenses for the purchase of any computer technology or equipment (as defined in section 170(e)(6)(F)(i)) or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is in school.
Clause (iii) shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominantly educational in nature.
(B) School
The term "school" means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law.
(4) Time when contributions deemed made
An individual shall be deemed to have made a contribution to an education individual retirement account on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof).
(c) Reduction in permitted contributions based on adjusted gross income
(1) In general
In the case of a contributor who is an individual, the maximum amount the contributor could otherwise make to an account under this section shall be reduced by an amount which bears the same ratio to such maximum amount as—
(A) the excess of—
(i) the contributor's modified adjusted gross income for such taxable year, over
(ii) $95,000 ($190,000 in the case of a joint return), bears to
(B) $15,000 ($30,000 in the case of a joint return).
(2) Modified adjusted gross income
For purposes of paragraph (1), the term "modified adjusted gross income" means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
(d) Tax treatment of distributions
(1) In general
Any distribution shall be includible in the gross income of the distributee in the manner as provided in section 72.
(2) Distributions for qualified education expenses
(A) In general
No amount shall be includible in gross income under paragraph (1) if the qualified education expenses of the designated beneficiary during the taxable year are not less than the aggregate distributions during the taxable year.
(B) Distributions in excess of expenses
If such aggregate distributions exceed such expenses during the taxable year, the amount otherwise includible in gross income under paragraph (1) shall be reduced by the amount which bears the same ratio to the amount which would be includible in gross income under paragraph (1) (without regard to this subparagraph) as the qualified education expenses bear to such aggregate distributions.
(C) Coordination with Hope and Lifetime Learning credits and qualified tuition programs
For purposes of subparagraph (A)—
(i) Credit coordination
The total amount of qualified education expenses with respect to an individual for the taxable year shall be reduced—
(I) as provided in section 25A(g)(2), and
(II) by the amount of such expenses which were taken into account in determining the credit allowed to the taxpayer or any other person under section 25A.
(ii) Coordination with qualified tuition programs
If, with respect to an individual for any taxable year—
(I) the aggregate distributions during such year to which subparagraph (A) and section 529(c)(3)(B) apply, exceed
(II) the total amount of qualified education expenses (after the application of clause (i)) for such year,
the taxpayer shall allocate such expenses among such distributions for purposes of determining the amount of the exclusion under subparagraph (A) and section 529(c)(3)(B).
(D) Disallowance of excluded amounts as deduction, credit, or exclusion
No deduction, credit, or exclusion shall be allowed to the taxpayer under any other section of this chapter for any qualified education expenses to the extent taken into account in determining the amount of the exclusion under this paragraph.
(3) Special rules for applying estate and gift taxes with respect to account
Rules similar to the rules of paragraphs (2), (4), and (5) of section 529(c) shall apply for purposes of this section.
(4) Additional tax for distributions not used for educational expenses
(A) In general
The tax imposed by this chapter for any taxable year on any taxpayer who receives a payment or distribution from a Coverdell education savings account which is includible in gross income shall be increased by 10 percent of the amount which is so includible.
(B) Exceptions
Subparagraph (A) shall not apply if the payment or distribution is—
(i) made to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary,
(ii) attributable to the designated beneficiary's being disabled (within the meaning of section 72(m)(7)),
(iii) made on account of a scholarship, allowance, or payment described in section 25A(g)(2) received by the designated beneficiary to the extent the amount of the payment or distribution does not exceed the amount of the scholarship, allowance, or payment,
(iv) made on account of the attendance of the designated beneficiary at the United States Military Academy, the United States Naval Academy, the United States Air Force Academy, the United States Coast Guard Academy, or the United States Merchant Marine Academy, to the extent that the amount of the payment or distribution does not exceed the costs of advanced education (as defined by
(v) an amount which is includible in gross income solely by application of paragraph (2)(C)(i)(II) for the taxable year.
(C) Contributions returned before certain date
Subparagraph (A) shall not apply to the distribution of any contribution made during a taxable year on behalf of the designated beneficiary if—
(i) such distribution is made before the first day of the sixth month of the taxable year following the taxable year, and
(ii) such distribution is accompanied by the amount of net income attributable to such excess contribution.
Any net income described in clause (ii) shall be included in gross income for the taxable year in which such excess contribution was made.
(5) Rollover contributions
Paragraph (1) shall not apply to any amount paid or distributed from a Coverdell education savings account to the extent that the amount received is paid, not later than the 60th day after the date of such payment or distribution, into another Coverdell education savings account for the benefit of the same beneficiary or a member of the family (within the meaning of section 529(e)(2)) of such beneficiary who has not attained age 30 as of such date. The preceding sentence shall not apply to any payment or distribution if it applied to any prior payment or distribution during the 12-month period ending on the date of the payment or distribution.
(6) Change in beneficiary
Any change in the beneficiary of a Coverdell education savings account shall not be treated as a distribution for purposes of paragraph (1) if the new beneficiary is a member of the family (as so defined) of the old beneficiary and has not attained age 30 as of the date of such change.
(7) Special rules for death and divorce
Rules similar to the rules of paragraphs (7) and (8) of section 220(f) shall apply. In applying the preceding sentence, members of the family (as so defined) of the designated beneficiary shall be treated in the same manner as the spouse under such paragraph (8).
(8) Deemed distribution on required distribution date
In any case in which a distribution is required under subsection (b)(1)(E), any balance to the credit of a designated beneficiary as of the close of the 30-day period referred to in such subsection for making such distribution shall be deemed distributed at the close of such period.
(9) Military death gratuity
(A) In general
For purposes of this section, the term "rollover contribution" includes a contribution to a Coverdell education savings account made before the end of the 1-year period beginning on the date on which the contributor receives an amount under
(i) the sum of the amounts received during such period by such contributor under such sections with respect to such person, reduced by
(ii) the amounts so received which were contributed to a Roth IRA under section 408A(e)(2) or to another Coverdell education savings account.
(B) Annual limit on number of rollovers not to apply
The last sentence of paragraph (5) shall not apply with respect to amounts treated as a rollover by the 1 subparagraph (A).
(C) Application of section 72
For purposes of applying section 72 in the case of a distribution which is includible in gross income under paragraph (1), the amount treated as a rollover by reason of subparagraph (A) shall be treated as investment in the contract.
(e) Tax treatment of accounts
Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to any Coverdell education savings account.
(f) Community property laws
This section shall be applied without regard to any community property laws.
(g) Custodial accounts
For purposes of this section, a custodial account shall be treated as a trust if the assets of such account are held by a bank (as defined in section 408(n)) or another person who demonstrates, to the satisfaction of the Secretary, that the manner in which he will administer the account will be consistent with the requirements of this section, and if the custodial account would, except for the fact that it is not a trust, constitute an account described in subsection (b)(1). For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the custodian of such account shall be treated as the trustee thereof.
(h) Reports
The trustee of a Coverdell education savings account shall make such reports regarding such account to the Secretary and to the beneficiary of the account with respect to contributions, distributions, and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required.
(Added
Amendment of Section
For termination of amendment by section 901 of
References in Text
The date of the enactment of this section, referred to in subsec. (d)(4)(B)(iv), is the date of enactment of
Amendments
2008—Subsec. (d)(9).
2005—Subsec. (b)(2)(A)(ii).
Subsec. (b)(3) to (5).
2004—Subsec. (d)(2)(C)(i).
Subsec. (d)(4)(B)(iii).
2003—Subsec. (d)(4)(B)(iv), (v).
2002—Subsec. (d)(4)(B)(iv).
2001—
Subsec. (a).
Subsec. (b)(1).
Subsec. (b)(1)(A)(iii).
Subsec. (b)(2).
Subsec. (b)(2)(B).
Subsec. (b)(4).
Subsec. (b)(5).
Subsec. (c)(1).
Subsec. (c)(1)(A)(ii).
Subsec. (c)(1)(B).
Subsec. (d)(2).
Subsec. (d)(2)(A), (B).
Subsec. (d)(2)(C).
Subsec. (d)(2)(D).
Subsec. (d)(4)(A).
Subsec. (d)(4)(C).
Subsec. (d)(4)(C)(i).
Subsec. (d)(5).
Subsec. (d)(6).
Subsec. (e).
Subsec. (h).
2000—Subsec. (d)(4)(B)(iii).
1998—Subsec. (b)(1).
Subsec. (b)(1)(E).
Subsec. (d)(1).
Subsec. (d)(2)(D).
Subsec. (d)(4)(B)(iv).
Subsec. (d)(4)(C).
"(i) such distribution is received on or before the day prescribed by law (including extensions of time) for filing such contributor's return for such taxable year, and".
Subsec. (d)(5).
Subsec. (d)(6).
Subsec. (d)(7).
Subsec. (d)(8).
Effective Date of 2008 Amendment
Amendment by
Effective Date of 2004 Amendment
Amendment by section 404(a) of
Amendment by section 406(b) of
Effective Date of 2003 Amendment
Effective Date of 2002 Amendment
Amendment by
Effective and Termination Dates of 2001 Amendment
Amendment by
Amendment by section 401(a)(1), (b)–(g)(1), (2)(C) of
Amendment by section 402(a)(4)(A), (C) of
Amendment by section 401(a)(1), (b)–(g)(1), (2)(C) of
Effective Date of 1998 Amendment
Amendment by
Effective Date
Section applicable to taxable years beginning after Dec. 31, 1997, see section 213(f) of
1 So in original. The word "the" probably should not appear.