Question by DCPete27: What if education costs are less than your Coverdell IRA value?
If the education IRA and 529 plan I have for my son grows in value such that all education expenses are completely covered, what happens with the remainder? If there is a penalty, what is the rate?
Answer by v b
Remember that the original contributions were after tax money, so only the earning can be taxed as income and subject to a 10% penalty.
For both funds, you can roll the money to another student (up to a first cousin).
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