Account Types
A grandparent wants to contribute to a Coverdell ESA for their grandchild. Which of the following is TRUE?
Coverdell: $2,000 total from ALL contributors per beneficiary per year.
Complete Analysis & Legal Rationale
The annual contribution limit for a Coverdell ESA is $2,000 per beneficiary from all sources combined. Any person (parents, grandparents, friends, or even the beneficiary) can contribute, subject to income limits.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
$10,000 is incorrect; the limit is $2,000.
Matches the verified teaching point in the explanation.
Coverdell contributions are made with after-tax dollars and are not tax-deductible.
Anyone can contribute, not just parents.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.