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) .
Correct Answer:
Verified
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