Instructions For Form 1099-Q - 2006
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25Instructions for Recipient
designated beneficiary is not a family member or is over age 30 (except
Account number. May show an account or other unique number the
for beneficiaries with special needs).
payer has assigned to distinguish your account.
Also, an additional 10% tax may apply to part or all of any amount
Box 1. Shows the gross distribution (including in-kind distributions) paid
included in income from the Coverdell ESA or qualified tuition program.
to you this year from a qualified tuition program (section 529) or a Coverdell
See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and
ESA (section 530). This amount is the total of the amounts shown in box
Other Tax-Favored Accounts, and your tax return instructions for
2 and box 3. See Pub. 970 for more information.
information about how to report the 10% tax.
Caution: For Coverdell ESA distributions (other than earnings on excess
If a final (total) distribution is made from your account and you have
contributions) made during 2006, the payer/trustee is not required to report
not recovered your contributions, you may have a deductible loss. Claim
amounts in boxes 2 and 3. Instead, the payer/trustee may report the fair
any loss on the “Other expenses” line of Schedule A (Form 1040), Itemized
market value of the Coverdell ESA as of December 31, 2006, in the blank
Deductions.
box below boxes 5 and 6. To figure your earnings and basis, use the
Coverdell ESA—Taxable Distributions and Basis worksheet in Pub. 970.
Box 3. Shows your basis in the gross distribution reported in box 1.
Box 2. Shows the earnings part of the gross distribution shown in box 1.
Box 4. This box is checked if you transferred the amount in box 1 from
Generally, amounts distributed are included in income unless they are
one
education
program
to
another
education
program
in
a
used to pay for qualified education expenses, transferred between
trustee-to-trustee transfer. However, this box may not be checked if the
trustees, or rolled over to another qualified education program within 60
transfer was made from a Coverdell ESA.
days. Report amounts included in income on the “Other income” line of
Box 5. Shows whether the gross distribution was from a qualified tuition
Form 1040.
program (private or state) or from a Coverdell ESA.
Under a qualified tuition program, the amount in box 2 is included
Distribution codes. For 2006, the payer/trustee may, but is not required
in income if there has been (a) more than one transfer or rollover within
to, report (in the box below boxes 5 and 6) one of the following codes to
any 12-month period with respect to the same beneficiary, or (b) a
identify the distribution you received: 1—Distributions (including transfers);
change in the designated beneficiary and the new designated beneficiary
2—Excess contributions plus earnings taxable in 2006; 3—Excess
is not a family member.
contributions plus earnings taxable in 2005; 4—Disability; 5—Death;
Under a Coverdell ESA, the amount in box 2 is included in income if
6—Prohibited transaction.
there has been a change in the designated beneficiary and the new
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