Self-Directed Coverdell ESA
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Everything you need to know about the Self-Directed Coverdell ESA.
A Coverdell ESA is a federally sponsored tax-advantaged account that can be set up and funded for any student under age 18 to help cover qualified education expenses
When you establish a Coverdell ESA, you have the ability to save for your children’s education expenses, by investing your funds in all types of assets.
A Self-Directed Coverdell ESA allows one to invest in alternative assets, such as real estate, along with traditional assets, including stocks and mutual funds.
The biggest advantage the Coverdell ESA has over a 529 plan is the ability to pick and choose the types of investments you can make with the plan. A 529 limits your options while a Coverdell allows for greater diversity.
When establishing a Self-Directed Coverdell ESA, there are a number of important rules to be aware of, such as contribution limits, tax treatment of distributions, prohibited transactions, and Unrelated Business Taxable Income (UBTI).
A Self-Directed HSA lets you invest in what you know and understand quickly and with no transaction fees. Real estate, investment funds, private businesses, and cryptocurrency are some of the most popular types investments you can make.