Coverdell Distributions

[Chief]

Say a person has two old Coverdell accounts that have been idle. They are worth much less than the funds invested. Can one close these accounts, take the distributions, and claim the loss on them?

[Chief]

Coverdell Distributions

Closing two old Coverdell accounts that has decreased in value. First of all is the money remaining in these accounts taxab;e? Can the loss be taken? Taxbook does not address the two questions. What do you think?

[BP.]

http://www.irs.gov/pub/irs-pdf/p970.pdf

Check out pp. 61-63 for discussion of taxable/tax free Coverdell distributions, and claiming a loss.

[Chief]

Coverdell Distributions

Thanks BP. That information is just what I needed. My client is thinking about the 2010 year.