Quentin and Janelle Would Like to Establish a Coverdell Education

question 6

Essay

Quentin and Janelle would like to establish a Coverdell Education Savings Account (CESA)for their daughter,age 5,and their nephew (the son of Quentin's brother),age 8.Their AGI is $145,000.Quentin's brother has already contributed $1,500 to a CESA for his son.
a.What is the maximum amount Quentin and Janelle can contribute to a CESA for their daughter and their nephew?
b.If their AGI were $208,000,what is the maximum amount they can contribute to a CESA for their daughter and their nephew?

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Definitions:

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The authority to alter or modify something, often found in contractual agreements or policies.

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A principle that establishes priority in various legal contexts, generally indicating that the first in time in taking certain actions has superior rights.

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The legal ability to transfer an ownership interest or right from one party to another.