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Mia Participated in a Qualified State Tuition Program for the Benefit

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Mia participated in a qualified state tuition program for the benefit of her son Michael.She contributed $15,000.
When Michael entered college, the balance in the fund satisfied the tuition charge of $20,000.When the funds were withdrawn to pay the college tuition for Michael, neither Mia nor Michael must include $5,000 ($20,000 - $15,000) in gross income.


Definitions:

Amortization

The process of spreading out a loan or intangible asset cost over a specified period of time.

Installment Notes

Long-term debts that are paid back in regular, periodic payments over time, which include both the principal and interest.

Journal Entries

Records of financial transactions in order by date, used in accounting.

Retirement

The act of leaving one's job and ceasing to work, typically upon reaching a certain age, often associated with receiving pension or retirement benefits.

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