Coverdell Qualifying Expenses loosely interpreted

[Rubyrod]

I’ve read the IRS rules regarding what you can use a Coverdell for, however my husband has interpreted the rules in that our D can also use the money for dorm expenses, i.e. bedding, storage drawers, towels, etc… I’m in disagreement. We are new to this whole college thing and would love some feedback from those of you that are experienced in all of this. Thanks.

[arabrab]

Nope.
Room & board directly charged by the college is ok.
Equivalent amount – with receipts! – for rent, utilities and food not to exceed the cost of what on-campus room and board charges.

Bedding, shampoo, towels – these are personal expenses.

[Rubyrod]

That’s what I thought. Thank you so much!!!

[noimagination]

http://www.irs.gov/publications/p970/ch07.html

Expenses for room and board must be incurred by students who are enrolled at least half-time (defined below).

The expense for room and board qualifies only to the extent that it is not more than the greater of the following two amounts.

The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.

The actual amount charged if the student is residing in housing owned or operated by the school.

Note that this differs from qualified educational expenses for determining taxable scholarship income.