How can my family make best use of a Coverdell (Section 530) program?]
There can be a number of Section 530 accounts for any student. Various family members, such as grandparents, aunts and uncles, and siblings–and persons outside the family–can contribute to separate accounts for a student. The original student beneficiary for the Section 530 account can be changed to another family member, such as a sibling–for example where the original beneficiary wins a scholarship or drops out. Funds can be rolled over tax-free from one family member’s Section 530 account to another’s–for example, to avoid distribution when the first family member reaches age 30. The education tax credit (where applicable) can be waived in favor of tax-free treatment for Section 530 account distributions.
