Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
I recently closed a very small Coverdell account for my college frosh son. When I got the check it was pay to the order [how the account was titled] which left me wondering what to do with it. I ended up endorsing it :Pay to son's college and signing it[the way the account was titled] and sent it to the college to apply to his account. (I cleared this with them beforehand.)

The account closing statement came later with this all noted as "premature distribution."

Should I be concerned about the closing statement note ?

Nah. I took a quick look at Pub 970 and can't find any information about reporting Coverdell withdrawals, but it does give instructions for calculating any taxable amount and how to report that and the penalty on it. As long as none of it is going to be taxable, don't fret about the wording. I'm not sure what the custodian is going to issue, if anything, during 1099 season, but there's time to deal with that if and when it's an issue.

Phil Marti
VITA Volunteer
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.