Form 1099-Q - Loss on Coverdell

Tax Reform Update: Most of the miscellaneous itemized deductions you may have claimed in the past remain suspended. These deductions include:

  • Unreimbursed employee expenses (travel expenses, dues/licenses, tools/supplies, education, etc.)
  • Expenses related to the collection of income (investment fees, safe deposit box rental, tax advice, etc.)
  • Tax preparation fees

Per IRS Publication 970 Tax Benefits for Education, page 47:

Losses on Coverdell ESA Investments

For tax years beginning after 2017 and before 2026, if you have a loss on your investment in a Coverdell ESA, you can’t deduct the loss on your income tax return. You have a loss only when all amounts from that account have been distributed and the total distributions are less than your unrecovered basis. Your basis is the total amount of contributions to that Coverdell ESA.

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