I am on the screen "Tell us about your education plans"
The screen has two questions:
- Were you the beneficiary of Coverdell ESA
- Did you receive a form 1099-Q for distributions from a Coverdell ESA
I am the parent of the student for whose benefit I have setup and funded this ESA. How should I interpret the word "you". Does it refer to the FILER of TurboTax
- If you refers to beneficiary the right response would be NO & NO
- If you refers to beneficiary the right response would be NO & YES
When I choose NO & YES I am seeing "Less common income go up by amount of distribution". However, I didn't see an increase in the tax amount that is due. My efforts to find an entry in the "Deductions & Credits" section that could explain this were in vain. This whole thing does not make sense. The main feature of Coverdell ESAs is that distributions are not taxed when those funds are used for qualified expenses.
TurboTax should make clear the meaning of these terms/words so that responses are correct.
Any help in explaining this is appreciated.
Regards,
Ramesh
