Which of the Following Statements Regarding a Coverdell Education Savings

question 103

Multiple Choice

Which of the following statements regarding a Coverdell Education Savings Account (CESA) is incorrect?

• A)In order to be tax-free,distributions must be used exclusively to pay the qualified education expenses of the beneficiary.
• B)Any person can contribute to a CESA,even if he or she is not related to the beneficiary.
• C)A person can contribute to only one CESA during each tax year.
• D)Contributions to a CESA are not tax-deductible.

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Definitions:

Random Fluctuation

Unpredictable changes or variations that do not follow a discernable pattern or trend.

School Performance

The measurement of a student's academic achievement based on grades, tests, and other criteria.

Glass Ceiling

An invisible barrier preventing minorities and women from rising to upper levels of management or leadership despite their qualifications.

Top-down Barrier

Obstacles to progress or communication that originate from higher levels in a hierarchical structure, affecting those at lower levels.