SIE Exam Question 591: Answer and Explanation

Question: 591

Which of the following is correct regarding Coverdell Education Savings Accounts (ESAs)?

• A. Private elementary school expenses are permitted to be paid from an ESA.
• B. The maximum annual contribution to an ESA is $5,000.
• C. Secondary school expenses are not permitted to be paid from an ESA.
• D. All of the above are correct.

Correct Answer: A

Explanation:

Money in a Coverdell Education Savings Account (ESA) may be used to pay private elementary and/or secondary school expenses. The maximum contribution to an ESA is $2,000 per beneficiary per year.