ToddL your answer is 100% correct and thank you; but you need to add one more step to Make Everyone "Comfortable" with Answering "Yes" to the Step-by-Step Interview question: "Did you roll over or transfer all or part of this distribution within 60 days to another Coverdell ESA?"
The issue is that the Interview question does not reflect the actual words on the Worksheets.
On TurboTax Premier CD/Download version you need to use the FORMS View; then open the Form 1099-Q and 1099Q Summary.
Answering YES in the Interview fills in the Worksheets as follows:
On page 2 Question #1 Rollovers of the 1099-Q worksheet, the word Coverdell is not printed; only QTP (Qualified Tuition Plan). A 529 is a QTP.
Rollovers, Transfers and Amounts Recontributed
1 Was the distribution rolled over and the following conditions met?
* Rolled over within 60 days of the distribution
* 12 months since a previous rollover (to the same beneficiary for a QTP). See Help
a Yes, entire distribution was rolled over meeting above conditions X
Then on the 1099Q Summary the the word Coverdell is not used. Only ESA (Education Saving Account) is used. A 529 is a ESA. The following is printed:
Coverdell Educational Savings Account (ESA) Distributions
1 Total gross distributions from box 1 of Form 1099-Q (Dist. Value)
a Less: Rollover to another ESA of beneficiary (Amount Rolled Over)
2 Balance of gross Coverdell ESA distributions (Zero)
What is filled out on the Worksheets accurately represents the complete Coverdell "transfer" to the 529 which as ToddL stated is "A contribution to a 529 plan is considered a qualified education expense," So technically it is NOT a Rollover but is does the same thing. I feel Comfortable with the way the Worksheets are completed.
