General Principles Ch 6 Flashcards
Prepaid tuition plans are generally counted as _______ assets to qualify for financial aid.
Parental
Under the Tax Cuts and Jobs Act (TCJA), federal tax-free withdrawals will be available from 529 plans for tuition in kindergarten through 12th grade up to ________ per year
$10,000
Under the SECURE Act, 529 plans may allow distributions to pay for student loans up to a lifetime limit of _______.
$10,000
The maximum amount that can be contributed to a Coverdell ESA, on behalf of an individual child from all sources combined, cannot exceed _______ in a given tax year.
$2,000
For financial aid purposes, qualified, education, benefits, including 529’s, and Coverdale ESAs, are treated as ________ assets.
Parental
Since 529 plan distributions from non-parent sources can be considered assets of the child and affect financial aid, it is recommended to use the non-parent 529 monies in the _________ years of college, so as not to affect the FAFSA/aid calculation.
Junior/senior
________ qualified elementary expenses include elementary religious school room and board, uniforms when required, to and from school, transportation, extended daycare programs.
Coverdell.
Regarding ESAs, account gains are _________ if the funds are used for qualified education expenses.
Tax-free
Regarding ESAs, contributions are considered to be a gift of _______ interest.
Present
Regarding ESAs, the custodian ________ prevent the beneficiary from taking a distribution, even if it is not to be used for qualified education expenses.
Cannot
Regarding ESAs, the funds must be distributed by the time the beneficiary reaches age ______ or rolled to a new beneficiary.
30
UTMA or UGMA?
Cash type investments plus real estate or limited partnerships
UTMA
UTMA or UGMA?
Cash type investments, such as EE bonds, stocks, mutual funds, CDs, savings, accounts, etc.
UGMA
True or false?
UGMA and UTMA accounts are not subject to the kiddie tax.
FALSE.
True or false: EE education bonds can be owned by a UTMA.
False. EE education bonds cannot be owned by a UTMA.
EE education bonds must be owned by _________.
An adult over age 24.
A gift to a qualified tuition program is considered a gift of a _______ interest. 
Present
A gift to a UTMA is considered a gift of a _________ interest.
Present
The owner of a QTP ________ the right to determine how and when to use the money in the account.
Retains
The custodian of a UTMA _______ control, when the student reaches the age of majority.
Loses
The owner of a qualified tuition program _______ change the beneficiary.
Can
The custodian of a UTMA ______ change the beneficiary
Cannot
QTP or UTMA:
Grows tax deferred and distributions are tax free if used for qualified educational expenses
Qualified tuition program
QTP or UTMA:
Growth and income distribution can be subject to both regular tax and kiddie tax.
UTMA
True or false:
Regarding Coverdell ESAs, expenses such as tuition can qualify, even when they are for graduate school, up to age 30. 
