Page 49

Coverdell ESA—Taxable Distributions and Basis Worksheet 6-3. Keep for Your Records How to complete this worksheet. • • • Complete Part I, lines A through H, on only one worksheet. Complete a separate Part II, lines 1 through 15, for each of your Coverdell ESAs. Complete Part III, the Summary (line 16), on only one worksheet. Caution. If you had a distribution from a qualified tuition program (QTP), see Coordination With Qualified Tuition Program (QTP) Distributions. Part I. Qualified Education Expenses (Complete for total expenses.) A. Enter your total qualified education expenses for 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A.

B. Enter those qualified education expenses paid for with tax-free educational assistance (for example, tax-free scholarships, veterans' educational benefits, Pell grants, employer-provided educational assistance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B.

C. Enter those qualified higher education expenses deducted on Schedule C (Form 1040), Schedule F (Form 1040), or Schedule 1 (Form 1040), line 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.

D. Enter those qualified higher education expenses on which an American opportunity or lifetime learning credit was based . . . . . . . D.

E. Add lines B, C, and D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.

F. Subtract line E from line A. This is your AQEE for 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F.

G. Enter your total distributions from all Coverdell ESAs during 2022. Don't include rollovers or the return of excess contributions. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G.

H. Divide line F by line G. Enter the result as a decimal (rounded to at least 3 places). If the result is 1.000 or more, enter 1.000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H. . Part II. Taxable Distributions and Basis (Complete separately for each account.) 1. Enter the amount contributed to this Coverdell ESA for 2022, including contributions made for 2022 from January 1, 2023, through the due date (not including extensions) for filing your 2022 return. Don't include rollovers or the return of excess contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Enter your basis in this Coverdell ESA as of December 31, 2021. See instructions . . . . . . . . . . . . . . . 2.

3. Add lines 1 and 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

4. Enter the total distributions from this Coverdell ESA during 2022. Don't include rollovers or the return of excess contributions. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Multiply line 4 by line H. This is the amount of AQEE attributable to this Coverdell ESA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

6. Subtract line 5 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

7. Enter the total value of this Coverdell ESA as of December 31, 2022, plus any outstanding rollovers. See instructions . . . . . . . . . . . . . . . . . . 7.

8. Add lines 4 and 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.

9. Divide line 3 by line 8. Enter the result as a decimal (rounded to at least 3 places). If the result is 1.000 or more, enter 1.000 . . . . . . . . . . . . . . . 9. . 10. Multiply line 4 by line 9. This is the amount of basis allocated to your distributions, and is tax free . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.

Note. If line 6 is zero, skip lines 11 through 13, enter -0- on line 14, and go to line 15. 11. Subtract line 10 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.

12. Divide line 5 by line 4. Enter the result as a decimal (rounded to at least 3 places). If the result is 1.000 or more, enter 1.000 . . . . . . . . . 12. . 13. Multiply line 11 by line 12. This is the amount of qualified education expenses allocated to your distributions, and is tax free . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.

14. Subtract line 13 from line 11. This is the portion of the distributions from this Coverdell ESA in 2022 that you must include in income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.

15. Subtract line 10 from line 3. This is your basis in this Coverdell ESA as of December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.

Part III. Summary (Complete only once.) 16. Taxable amount. Add together all amounts on line 14 for all your Coverdell ESAs. Enter here and include on Schedule 1 (Form 1040), line 8z, listing the type and amount of income . . . . . . . . . 16.

Chapter 6 Coverdell Education Savings Account (ESA) Page 49