Pub. 4 2014-2015 Issue 4

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S January • February 2015 9 Determining qualified education ex- penses canbe tricky, so taxpayers should be referred to IRS Publication 970, Tax Benefits for Education, or to their com- petent tax advisor for specific details. NOTE: A student is considered to be enrolled at least half-time if the student takes at least half of the normal academic workload for the specific course of study. Half-time workload is determined by the educational institu- tion where the student is enrolled, but the institution’s standard for full-time workloads must equal or exceed the standards established by the Depart- ment of Education. Contributions made to qualified tu- ition programs (i.e., 529 plans) also are considered qualified education expens- es for ESA distributions. This explains why ESA assets may be transferred to a qualified tuition program. Nonqualified Expenses If the ESA assets are not used for qualified education expenses or if the distribution exceeds the total amount of qualified expenses for the year, the assets will be subject to tax on a pro rata basis, taking into account the contribu- tions and earnings in all of the desig- nated beneficiary’s ESAs. An additional 10 percent penalty tax also may apply to the earnings, unless the designated beneficiary qualifies for a penalty tax exception. Penalty tax exceptions may be found in Publication 970 and include CEDCO Small Business Finance Corporation Your Best Soursce for SBA Real Estate Loans New Easier Qualification Uninterrupted access to money through a monthly SBA-backed bond auction Low fixed-rate financing Low down payments CEDCO Small Business Finance Corporation Colorado’s SBA 504 Loan Expert TM 1175 Osage Street, Suite 110 Denver CO 80204 Denver 303-893-8989 Grand Junction 970-243-1852 www.cedco.org  More stability for your operation  A stronger balance sheet  An asset to sell when you’re ready AS A LEADING SBA 504 LENDER WE MAKE IT EASY FOR YOU  Buy, Build, Remodel or Expand Real Estate  Purchase and install long-lasting equipment  Fast, expert processing - with low loan costs  Refinance may be an option  We lend up to $5 million: borrow up to $20 million when combined with bank financing  Interest rate as low as 5.25%, fixed for 20 years  Down payments range from 10% to 20%  Most small Businesses are Eligible STREAMLINED PROCESSING  Front Range and mid-mountains call Jeff or Mary Jane 303-893-8989  Western Colorado call Pat 970-243-1861 Qualified elementary • Tuition, fees, academic tutoring, special needs services and secondary for special needs beneficiaries, books, supplies, and education expenses other equipment incurred with enrollment or atten- dance at an eligible elementary and secondary school • Room and board, uniforms, transportation, and sup- plementary items and services (including extended day programs) required or provided by an eligible school in connection with enrollment or attendance • Certain computer technology or equipment or Inter- net access and related services, if used by the desig- nated beneficiary and his family during the years he is in school (expenses for computer software designed for sports, games, or hobbies are not included unless the software is predominantly educational) Qualified higher • Tuition, fees, books, supplies, and equipment required education expenses for the enrollment or attendance at an eligible post- secondary educational institution • Certain room and board expenses for students who are enrolled at least half-time • Special needs services for special needs beneficiaries that are incurred in connection with enrollment or attendance at an eligible institution • a distribution made to a death benefi- ciary upon the death of the designated beneficiary; • a distributionmade because the desig- nated beneficiary is disabled; • a distribution included in income because the designated beneficiary received a scholarship or other type of educational assistance (applies only if the distribution does not exceed the scholarship, allowance, or payment); • a distribution made on account of the designated beneficiary’s attendance at  Coverdell ESAs  continued on page 10