Alex and Alicia are married and have two children ages 5 and 9. Their adjusted gross income for the year is $86,000. During the year they establish a Coverdell Education Savings Account (CESA) for each child.
I.They can contribute $2,000 to each child's CESA.
II.They can deduct the CESA contributions for their adjusted gross income.

Question

Alex and Alicia are married and have two children ages 5 and 9. Their adjusted gross income for the year is $86,000. During the year they establish a Coverdell Education Savings Account (CESA) for each child.
I.They can contribute $2,000 to each child's CESA.
II.They can deduct the CESA contributions for their adjusted gross income.
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Quizplus · Accepted Answer

Statement I is correct because the maximum contribution to a Coverdell Education Savings Account (CESA) per child per year is $2,000, regardless of the number of contributors. Statement II is incorrect because contributions to a CESA are not deductible from the contributors' adjusted gross income.

Alex and Alicia Are Married and Have Two Children Ages