We contributed to a CESA for our daughter's education. Fortunately (or not in this case, I think), she earned a merit scholarship and I transferred my GI Bill eligibility to her. That pretty much covered her college education. She's graduating this summer and we are biting the tax bullet on taking the full amount out (she doesn't contemplate grad school and is not anticipating children). So, this distribution is not education related. It's going into a brokerage account for her future use in whatever her investment desires are for the future. I'm doing her taxes and right now, the $81K gross distribution on the 1099Q is giving us a $14K tax bite. Does that sound "normal?" Also, Tax is asking if the distribution was a return of our Coverdell contribution? I'm not sure exactly what that means... Sorry for the long story and thanks. Bob H.
