Which of the Following Statements Regarding Coverdell Education Savings Accounts

question 383

Multiple Choice

Which of the following statements regarding Coverdell Education Savings Accounts is incorrect, disregarding any AGI limits?

• A) Contributions can be made until the beneficiary reaches 18.
• B) Contributors can make nondeductible contributions of up to $2,000 for each beneficiary.
• C) Distributions cannot be used for elementary and secondary education expenses.
• D) Distributions to the beneficiary are not taxable as long as they are used for tuition, fees, room and board.

---

Definitions:

Market Wages

The prevailing rate of pay for work or services at a particular time and place, determined by supply and demand in the labor market.

Productivity

The efficiency with which inputs are converted into outputs in a production process, often measured as the ratio of output to input over a specific period.

Income Distribution

The way in which the total income of an economy is distributed among its population.

Rich

Having a great deal of wealth, assets, or resources; affluent.