Source: http://taxtv.com/code/00433-USCODE-2011-title26-subtitleA-chap1-subchapF-partVIII-sec530/
Timestamp: 2017-06-27 10:23:21
Document Index: 655420131

Matched Legal Cases: ['§530', '§530', '§530', '§213', '§6004', '§1', '§319', '§401', '§1', '§411', '§107', '§404', '§412', '§109', '§412', '§412', '§404', '§406', '§1', '§1', '§1', '§401', '§401', '§401', '§401', '§402', '§401', '§401', '§401', '§401', '§401', '§401', '§401', '§401', '§401', '§1', '§401', '§401', '§1', '§1', '§1', '§1', '§6004', '§6004', '§6004', '§6004', '§6004', '§6004', '§6004', '§6004', '§6004', '§6004', '§107', '§530']

IRC §530. Coverdell education savings accounts - TaxTV.com
IRC §530. Coverdell education savings accounts
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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 1 (relating to imposition of tax on unrelated business income of charitable organizations).
(A) No contribution will be accepted—
(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.
(3) Qualified elementary and secondary education expenses
(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.
(4) Time when contributions deemed made
(c) Reduction in permitted contributions based on adjusted gross income
(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) Distributions for qualified education expenses
(B) Distributions in excess of expenses
(C) Coordination with Hope and Lifetime Learning credits and qualified tuition programs
(i) Credit coordination
(ii) Coordination with qualified tuition programs
(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
(3) Special rules for applying estate and gift taxes with respect to account
(4) Additional tax for distributions not used for educational expenses
(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 section 2005(e)(3) of title 10, United States Code, as in effect on the date of the enactment of this section) attributable to such attendance, or
(v) an amount which is includible in gross income solely by application of paragraph (2)(C)(i)(II) for the taxable year.
(i) such distribution is made before the first day of the sixth month of the taxable year following the taxable year, and
(5) Rollover contributions
(6) Change in beneficiary
(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
(9) Military death gratuity
(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
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
(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.
(Added Pub. L. 105–34, title II, §213(a), Aug. 5, 1997, 111 Stat. 813; amended Pub. L. 105–206, title VI, §6004(d)(1)–(3)(A), (5)–(8), July 22, 1998, 112 Stat. 793, 794; Pub. L. 106–554, §1(a)(7) [title III, §319(6)], Dec. 21, 2000, 114 Stat. 2763, 2763A–646; Pub. L. 107–16, title IV, §§401(a)(1), (b)–(g)(1), (2)(C), 402(a)(4)(A), (C), June 7, 2001, 115 Stat. 57–61; Pub. L. 107–22, §1(a)(1)–(5), July 26, 2001, 115 Stat. 196; Pub. L. 107–147, title IV, §411(f), Mar. 9, 2002, 116 Stat. 46; Pub. L. 108–121, title I, §107(a), Nov. 11, 2003, 117 Stat. 1339; Pub. L. 108–311, title IV, §§404(a), 406(b), Oct. 4, 2004, 118 Stat. 1188, 1189; Pub. L. 109–135, title IV, §412(ff), Dec. 21, 2005, 119 Stat. 2639; Pub. L. 110–245, title I, §109(c), June 17, 2008, 122 Stat. 1632.)
2008—Subsec. (d)(9). Pub. L. 110–245 added par. (9).
2005—Subsec. (b)(2)(A)(ii). Pub. L. 109–135, §412(ff)(2), substituted “paragraph (3)” for “paragraph (4)”.
Subsec. (b)(3) to (5). Pub. L. 109–135, §412(ff)(1), redesignated pars. (4) and (5) as (3) and (4), respectively, and struck out former par. (3) which read as follows: “The term ‘eligible educational institution’ has the meaning given such term by section 529(e)(5).”
2004—Subsec. (d)(2)(C)(i). Pub. L. 108–311, §404(a), struck out “higher” after “qualified” in introductory provisions.
Subsec. (d)(4)(B)(iii). Pub. L. 108–311, §406(b), substituted “designated beneficiary” for “account holder”.
2003—Subsec. (d)(4)(B)(iv), (v). Pub. L. 108–121 added cl. (iv) and redesignated former cl. (iv) as (v).
2002—Subsec. (d)(4)(B)(iv). Pub. L. 107–147 substituted “by application of paragraph (2)(C)(i)(II)” for “because the taxpayer elected under paragraph (2)(C) to waive the application of paragraph (2)”.
2001—Pub. L. 107–22, §1(a)(5), amended section catchline generally, substituting “Coverdell education savings” for “Education individual retirement”.
Subsec. (a). Pub. L. 107–22, §1(a)(2), substituted “A Coverdell education savings account” for “An education individual retirement account” and “the Coverdell education savings account” for “the education individual retirement account”.
Subsec. (b)(1). Pub. L. 107–22, §1(a)(1), (3), in heading, substituted “Coverdell education savings account” for “Education individual retirement account” and, in introductory provisions, substituted “ ‘Coverdell education savings account’ ” for “ ‘education individual retirement account’ ” and “designated as a Coverdell education savings account” for “designated as an education individual retirement account”.
Pub. L. 107–16, §§401(d), 901, temporarily inserted concluding provisions. See Effective and Termination Dates of 2001 Amendment note below.
Pub. L. 107–16, §§401(c)(3)(A), 901, temporarily struck out “higher” before “education expenses” in introductory provisions. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (b)(1)(A)(iii). Pub. L. 107–16, §§401(a)(1), 901, temporarily substituted “$2,000” for “$500”. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (b)(2). Pub. L. 107–16, §§401(c)(1), 901, temporarily amended heading and text of par. (2) generally, substituting present provisions for provisions which defined “qualified higher education expenses” as having the meaning given such term by section 529(e)(3), reduced as provided in section 25A(g)(2), and including amounts paid or incurred to purchase tuition credits or certificates, or to make contributions to an account, under a qualified State tuition program for the benefit of the beneficiary of the account. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (b)(2)(B). Pub. L. 107–16, §402(a)(4)(A), (C), in heading, substituted “Qualified tuition” for “Qualified State tuition” and in text, substituted “qualified tuition” for “qualified State tuition”.
Subsec. (b)(4). Pub. L. 107–16, §§401(c)(2), 901, temporarily added par. (4). See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (b)(5). Pub. L. 107–16, §§401(f)(1), 901, temporarily added par. (5). See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (c)(1). Pub. L. 107–16, §§401(e), 901, temporarily substituted “In the case of a contributor who is an individual, the maximum amount the contributor” for “The maximum amount which a contributor” in introductory provisions. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (c)(1)(A)(ii). Pub. L. 107–16, §§401(b)(1), 901, temporarily substituted “$190,000” for “$150,000”. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (c)(1)(B). Pub. L. 107–16, §§401(b)(2), 901, temporarily substituted “$30,000” for “$10,000”. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(2). Pub. L. 107–16, §§401(c)(3)(B), 901, temporarily struck out “higher” before “education” in heading. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(2)(A), (B). Pub. L. 107–16, §§401(c)(3)(A), 901, temporarily struck out “higher” before “education”. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(2)(C). Pub. L. 107–16, §§401(g)(1), 901, temporarily amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: “A taxpayer may elect to waive the application of this paragraph for any taxable year.” See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(2)(D). Pub. L. 107–16, §§401(g)(2)(C), 901, in heading, temporarily substituted “deduction, credit, or exclusion” for “credit or deduction” and in text, temporarily substituted “, credit, or exclusion” for “or credit”. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(4)(A). Pub. L. 107–22, §1(a)(1), substituted “a Coverdell education savings account” for “an education individual retirement account”.
Subsec. (d)(4)(C). Pub. L. 107–16, §§401(f)(2)(B), 901, temporarily substituted “certain date” for “due date of return” in heading. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(4)(C)(i). Pub. L. 107–16, §§401(f)(2)(A), 901, temporarily added cl. (i) and struck out former cl. (i) which read as follows: “such distribution is made on or before the day prescribed by law (including extensions of time) for filing the beneficiary’s return of tax for the taxable year or, if the beneficiary is not required to file such a return, the 15th day of the 4th month of the taxable year following the taxable year; and”. See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (d)(5). Pub. L. 107–22, §1(a)(1), (4), substituted “distributed from a Coverdell education savings account” for “distributed from an education individual retirement account” and “another Coverdell education savings account” for “another education individual retirement account”.
Subsec. (d)(6). Pub. L. 107–22, §1(a)(1), substituted “a Coverdell education savings account” for “an education individual retirement account”.
Subsec. (e). Pub. L. 107–22, §1(a)(4), substituted “Coverdell education savings account” for “education individual retirement account”.
Subsec. (h). Pub. L. 107–22, §1(a)(1), substituted “a Coverdell education savings account” for “an education individual retirement account”.
2000—Subsec. (d)(4)(B)(iii). Pub. L. 106–554 substituted a comma for a semicolon before “or” at end.
1998—Subsec. (b)(1). Pub. L. 105–206, §6004(d)(1), inserted “an individual who is” before “the designated beneficiary” in introductory provisions.
Subsec. (b)(1)(E). Pub. L. 105–206, §6004(d)(2)(A), amended subpar. (E) generally. Prior to amendment, subpar. (E) read as follows: “Upon the death of the designated beneficiary, any balance to the credit of the beneficiary shall be distributed within 30 days after the date of death to the estate of such beneficiary.”
Subsec. (d)(1). Pub. L. 105–206, §6004(d)(3)(A), substituted “section 72” for “section 72(b)”.
Subsec. (d)(2)(D). Pub. L. 105–206, §6004(d)(5), added subpar. (D).
Subsec. (d)(4)(B)(iv). Pub. L. 105–206, §6004(d)(6), added cl. (iv).
Subsec. (d)(4)(C). Pub. L. 105–206, §6004(d)(7), substituted “Contributions” for “Excess contributions” in heading and amended text of introductory provisions and cl. (i) generally. Prior to amendment, text read as follows: “Subparagraph (A) shall not apply to the distribution of any contribution made during a taxable year on behalf of a designated beneficiary to the extent that such contribution exceeds $500 if—
Subsec. (d)(5). Pub. L. 105–206, §6004(d)(8)(A), added first sentence and struck out former first sentence which read as follows: “Paragraph (1) shall not apply to any amount paid or distributed from an education individual retirement account to the extent that the amount received is paid into another education individual retirement 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 not later than the 60th day after the date of such payment or distribution.”
Subsec. (d)(6). Pub. L. 105–206, §6004(d)(8)(B), inserted before period at end “and has not attained age 30 as of the date of such change”.
Subsec. (d)(7). Pub. L. 105–206, §6004(d)(2)(B), inserted at end “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).”
Subsec. (d)(8). Pub. L. 105–206, §6004(d)(2)(C), added par. (8).
Amendment by Pub. L. 110–245 applicable with respect to deaths from injuries occurring on or after June 17, 2008, with provision for application of amendment to deaths from injuries occurring on or after Oct. 7, 2001, and before June 17, 2008, see section 109(d)(1), (2) of Pub. L. 110–245, set out as a note under section 408A of this title.
Amendment by section 404(a) of Pub. L. 108–311 effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. 107–16, to which such amendment relates, see section 404(f) of Pub. L. 108–311, set out as a note under section 45A of this title.
Amendment by section 406(b) of Pub. L. 108–311 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 406(h) of Pub. L. 108–311, set out as a note under section 55 of this title.
Pub. L. 108–121, title I, §107(b), Nov. 11, 2003, 117 Stat. 1339, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2002.”
Amendment by section 401(a)(1), (b)–(g)(1), (2)(C) of Pub. L. 107–16 applicable to taxable years beginning after Dec. 31, 2001, see section 401(h) of Pub. L. 107–16, set out as a note under section 25A of this title.
Amendment by section 402(a)(4)(A), (C) of Pub. L. 107–16 applicable to taxable years beginning after Dec. 31, 2001, see section 402(h) of Pub. L. 107–16, set out as an Effective Date of 2001 Amendment note under section 72 of this title.
Amendment by section 401(a)(1), (b)–(g)(1), (2)(C) of Pub. L. 107–16 inapplicable to taxable, plan, or limitation years beginning after Dec. 31, 2012, and the Internal Revenue Code of 1986 to be applied and administered to such years as if such amendment had never been enacted, see section 901 of Pub. L. 107–16, set out as a note under section 1 of this title.
Section applicable to taxable years beginning after Dec. 31, 1997, see section 213(f) of Pub. L. 105–34, set out as an Effective Date of 1997 Amendment note under section 26 of this title.
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