Disclosure Statement for Xxxxxxxxx Education Savings Accounts Sample Clauses

Disclosure Statement for Xxxxxxxxx Education Savings Accounts. 1. Who is Eligible for a Xxxxxxxxx Education Savings Account? Anyone may contribute to a Xxxxxxxxx Education Savings Account regardless of his or her relationship to the beneficiary. The beneficiary of a Xxxxxxxxx Education Savings Account
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Disclosure Statement for Xxxxxxxxx Education Savings Accounts. 1. Who is Eligible for a Xxxxxxxxx Education Savings Account? Anyone may contribute to a Xxxxxxxxx Education Savings Account regardless of his or her relationship to the beneficiary. The beneficiary of a Xxxxxxxxx Education Savings Account must be under age 18 at the time a contribution is made to a Xxxxxxxxx Education Savings Account on his or her behalf, unless the beneficiary is a “Special Needs” beneficiary as discussed later. A Xxxxxxxxx Education Savings Account may also be established to receive rollover contributions or transfers from another Xxxxxxxxx Education Savings Account. Xxxxxxxxx Education Savings Accounts are subject to limitations based on the status of the contributor as well as the status of the beneficiary. For purposes of this discussion, except as noted, the term “beneficiary” is used to refer to an individual whose education is to be financed, in part or in whole, through a Xxxxxxxxx Education Savings Account.
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Disclosure Statement for Xxxxxxxxx Education Savings Accounts. The Custodian will not under any circumstances be responsible for the timing, purpose or propriety of any contribution or of any distribution made hereunder, nor shall the Custodian incur any liability or responsibility for any tax imposed on account of any such contribution or distribution. Further, the Custodian shall not incur any liability or responsibility in taking or omitting to take any action based on any notice, election, or instruction or any written instrument believed by the Custodian to be genuine and to have been properly executed. The Custodian shall be under no duty of inquiry with respect to any such notice, election, instruction, or written instrument, but in its discretion may request any tax waivers, proof of signatures or other evidence which it reasonably deems necessary for its protection. The depositor and the successors of the depositor including any executor or administrator of the depositor shall, to the extent permitted by law, indemnify the Custodian and its successors and assigns against any and all claims, actions or liabilities of the Custodian to the depositor or the successors or beneficiaries of the depositor whatsoever (including without limitation all reasonable expenses incurred in defending against or settlement of such claims, actions or liabilities) which may arise in connection with this Agreement or the custodial account, except those due to the Custodian’s own bad faith, gross negligence or willful misconduct. The Custodian shall not be under any duty to take any action not specified in this Agreement, unless the depositor shall furnish it with instructions in proper form and such instructions shall have been specifically agreed to by the Custodian, or to defend or engage in any suit with respect hereto unless it shall have first agreed in writing to do so and shall have been fully indemnified to its satisfaction.
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Related to Disclosure Statement for Xxxxxxxxx Education Savings Accounts

  • How Are Contributions to a Xxxxxxxxx Education Savings Account Reported for Federal Tax Purposes? Contributions to a Xxxxxxxxx Education Savings Account are reported on IRS Form 5498-ESA.

  • Disclosure Statement for Xxxx IRAs 1. Am I Eligible to Contribute to a Xxxx XXX? Anyone with compensation income whose Modified Adjusted Gross Income (AGI) does not exceed the limits described below is eligible to contribute to a Xxxx XXX. (For convenience, all future references to compensation are deemed to mean “earned income” in the case of a self- employed individual.) Employers may also contribute to Xxxx IRAs established for the benefit of their employees. You may also establish a Xxxx XXX to receive rollover contributions or transfers from another Xxxx XXX or, in some cases, from a Traditional IRA. A Qualified Rollover Contribution can be made to a Xxxx XXX and is a distribution from an IRA that meets the requirements of section 408(d)(3), a rollover from a designated Xxxx account described in section 402A, or a rollover from an eligible retirement plan as described in section 402(c)(8)(B).

  • What Forms of Distribution Are Available from a Xxxxxxxxx Education Savings Account Distributions may be made as a lump sum of the entire account, or distributions of a portion of the account may be made as requested.

  • When Must Distributions from a Xxxxxxxxx Education Savings Account Begin? Distribution of a Xxxxxxxxx Education Savings Account must be made (or otherwise will be deemed made) no later than 30 days from the earlier of the beneficiary’s death or attainment of age 30. A distribution from a Xxxxxxxxx Education Savings Account may be rolled over to another beneficiary’s Xxxxxxxxx Education Savings Account according to the requirements of Section (4). Note that the Economic Growth and Tax Relief Reconciliation Act of 2001 waives the distribution age limitation if the beneficiary of the Xxxxxxxxx Education Savings Account is a “Special Needs” student.

  • How Are Distributions from a Xxxxxxxxx Education Savings Account Taxed For Federal Income Tax Purposes? Amounts distributed are generally excludable from gross income if they do not exceed the beneficiary’s “qualified higher education expenses” for the year or are rolled over to another Xxxxxxxxx Education Savings Account according to the requirements of Section (4). “Qualified higher education expenses” generally include the cost of tuition, fees, books, supplies, and equipment for enrollment at (i) accredited post-secondary educational institutions offering credit toward a bachelor’s degree, an associate’s degree, a graduate-level or professional degree or another recognized post-secondary credential and (ii) certain vocational schools. In addition, room and board may be covered if the beneficiary is at least a “half-time” student. This amount may be reduced or eliminated by certain scholarships, qualified state tuition programs, HOPE, Lifetime Learning tax credits, proceeds of certain savings bonds, and other amounts paid on the beneficiary’s behalf as well as by any other deductions or credits taken for the same expenses. The definition of “qualified education expenses” includes expenses more frequently and directly related to elementary and secondary school education, including the purchase of computer technology or equipment or Internet access and related services. To the extent payments during the year exceed such amounts, they are partially taxable and partially non-taxable similar to payments received from an annuity. Any taxable portion of a distribution is generally subject to a 10% penalty tax in addition to income tax unless the distribution is (i) due to the death or disability of the beneficiary, (ii) made on account of a scholarship received by the beneficiary, or (iii) is made in a year in which the beneficiary elects the HOPE or Lifetime Learning credit and waives the exclusion from income of the Xxxxxxxxx Education Savings Account distribution. You may be allowed to take both the HOPE or Lifetime Learning credits while simultaneously taking distributions from Xxxxxxxxx Education Savings Accounts. However, you cannot claim a credit for the same educational expenses paid for through Xxxxxxxxx Education Savings Account distributions. To the extent a distribution is taxable, capital gains treatment does not apply to amounts distributed from the account. Similarly, the special five- and ten-year averaging rules for lump-sum distributions do not apply to distributions from a Xxxxxxxxx Education Savings Account. The taxable portion of any distribution is taxed as ordinary income. The IRS does not require withholding on distributions from Xxxxxxxxx Education Savings Accounts.

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