Which of the Following Statements Regarding a Coverdell Education Savings

question 94

Multiple Choice

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

• A)Distributions used to pay qualified higher education expenses of the beneficiary are tax-free.
• B)A person can contribute to a CESA only if the beneficiary is related by blood or marriage.
• C)Taxpayers who file a joint tax return can contribute to a CESA only if their AGI is less than $150,000.
• D)Contributions to a CESA are tax deductible and the distributions are tax-free (if used for their intended purpose).

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Definitions:

UCC 9-307

A provision under the Uniform Commercial Code that deals with a buyer's rights in goods purchased from a seller who does not have clear title, subject to certain conditions.

Good Faith Purchaser

An individual who buys property without knowledge of any existing claims, disputes, or faults of the property, thereby obtaining legal ownership.

Security Liens

A legal right or interest that a creditor has in the debtor's property, lasting usually until the debt that it secures is paid.

Title to Goods

refers to the legal right to own, use, or sell a specific item or piece of property.