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Finra Exam Series-6 Topic 4 Question 48 Discussion
Topic #: 4
Which of the following statements regarding a Coverdell Education Savings Plan (ESA) are true?
i. There are income limitations regarding those who may contribute to an ESA
ii. There is a maximum annual aggregate amount that can be contributed to a single beneficiary's account.
iii. Contributions to an ESA are tax deductible.
IV. The monies must be used prior to the beneficiary's 30th birthday for education-related expenses in order to avoid paying both taxes and a penalty.
The true statement is that reinvested dividends and capital gain distributions count toward reaching a breakpoint under the rights of accumulation. The rights of accumulation are not something that all mutual funds with front-end loads must offer. There is no time limit on the accumulation period. The rights of accumulation and the letter of intent are two separate animals; neither has anything to do with the other.
Roxane
3 days agoIluminada
4 days ago