Detailed Answer
(d) The requirement is to determine which statement
concerning an education IRA is not correct. Contributions to an
education IRA are not deductible, but withdrawals of earnings
will be tax-free if used to pay the qualified higher education expenses
of the designated beneficiary. The maximum amount that
can be contributed to an education IRA is limited to $2,000, but
the annual contribution is phased out by adjusted gross income
in excess of certain thresholds. Contributions generally cannot
be made to an education IRA if the designated beneficiary is age
eighteen or older.
