Coverdell ESA distributions.
Any distribution or rollover made from a Coverdell ESA will no longer be reported on
Form 1099-R, Distributions From Pensions,
Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Instead, report these distributions on
Form 1099-Q, Payments
From Qualified Education Programs (Under Sections 529 and 530).
For 2003, Notice 2003-53, 2003-33 I.R.B. 362, modifies Coverdell ESA trustee reporting of earnings and basis in boxes 2 and
3 unless the
distribution includes a distribution of earnings on excess contributions. See the instructions for Box 2 for reporting distributions
of these
earnings.
If earnings and basis are not reported, boxes 2 and 3 should be left blank. Instead, trustees must report the fair market
value (FMV) of the
account as of the end of the year. Report the FMV in the blank box below boxes 5 and 6. Label the amount “FMV.” Also, a reference to
Publication 970, Tax Benefits for Education, is included on Copy B as required by the notice.
In addition to these specific instructions, you should also use the 2003 General Instructions for Forms 1099, 1098, 5498, and W-2G.
Those general instructions include information about:
- Backup withholding
- Magnetic media and electronic reporting requirements
- Penalties
- Who must file (nominee/middleman)
- When and where to file
- Taxpayer identification numbers
- Statements to recipients
- Corrected and void returns
- Other general topics
You can get the general instructions from the IRS website at www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
