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Subject:  Education Accounts Date:  8/15/2012  2:34 PM
Author:  PSUEngineer Number:  116535 of 129658

I'm trying to plan ahead for distributions from the two educations accounts I have for my daughter, a Coverdell Education Savings Account and a Qualified Tuition Program (529 plan). As with many questions, my question has to do with when things are paid versus when the expenses occurred. I've read Publication 970 but didn't see my issue addressed.

Spring semester starts 1/9/2013
Spring semester tuition due 12/11/2012

Are the expenses occurred when the tuition is paid in 2012 or are they incurred in 2013 since the semester starts in January 2013?

I do know that if I take a distribution from either or both accounts in December 2012, I'll receive a Form 1099-Q dated for 2012. If the qualified education expenses are considered to be incurred at time of payment due date (12/11/2012), then there isn't a problem. If the qualified education expenses are considered to be incurred during the academic year (1/9/2013 through 5/7/2013 for the spring semester), then I would have an excess distribution so the distribution would not be tax-free.

Should I wait until after January 1, 2013 to take a distribution from either account for the Spring 2013 semester?
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