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INCOME LIMITS  
CollegeAmerica None. Anyone can contribute.
Coverdell Education Savings Account Ability to contribute is phased out for married couples with incomes between $190,000 and $220,000 and for individuals with incomes between $95,000 and $110,000.*
UGMA/UTMA None.
Parents’ investment account None.
CONTRIBUTION LIMITS  
CollegeAmerica $250,000 per beneficiary.
Coverdell Education Savings Account $2,000 per year per beneficiary.*
UGMA/UTMA None
Parents’ investment account None
INCOME TAX TREATMENTS  
CollegeAmerica Earnings can grow free from federal tax. Withdrawals for qualified higher education expenses are free from federal tax.*
Coverdell Education Savings Account Earnings can grow tax-free. Withdrawals for qualified elementary, secondary* and higher education expenses are free from federal tax.
UGMA/UTMA For children under age 14, the first $850 of earnings is tax-free. Earnings between $850 and $1,700 are taxed at the child’s rate; earnings above $1,700 are taxed at the parents’ rate. All earnings for children age 14 and older are taxed at the child’s rate.
Parents’ investment account Dividends and interest are taxed to owner at applicable rates. Capital gains are taxed at capital gain rates.
CONTROL  
CollegeAmerica Owner maintains control of the assets, decides when withdrawals will be made and can change the beneficiary.
Coverdell Education Savings Account Beneficiary may assume control at age of majority, 18 or 21 in most states.
UGMA/UTMA Beneficiary assumes control at age of majority, 18 or 21 in most states.
Parents’ investment account Owner maintains control of the assets and decides when withdrawals will be made.
INVESTMENT FLEXIBILITY  
CollegeAmerica You can move your assets among funds once each calendar year or when you change the beneficiary.
Coverdell Education Savings Account You can move your assets as often as you want.
UGMA/UTMA You can move your assets as often as you want, but each transfer is usually a taxable event.
Parents’ investment account You can move your assets as often as you want, but each transfer is usually a taxable event.
USES  
CollegeAmerica Higher education expenses, such as tuition, books, and room and board.
Coverdell Education Savings Account Education expenses such as tuition, books, and room and board for kindergarten through high school,* college and graduate school.
UGMA/UTMA Any use that benefits the child.
Parents’ investment account Any use.
INVESTMENT OPTIONS  
CollegeAmerica Offers 21 American Funds in five share classes.
Coverdell Education Savings Account 22 American Funds.
UGMA/UTMA All 29 American Funds.
Parents’ investment account All 29 American Funds.
ABILITY TO CHANGE BENEFICIARIES  
CollegeAmerica Yes 
Coverdell Education Savings Account Yes 
UGMA/UTMA No 
Parents’ investment account Not applicable
PENALTIES ON NON-QUALIFIED WITHDRAWALS  
CollegeAmerica Ordinary income taxes plus a 10% federal tax penalty on earnings.
Coverdell Education Savings Account Ordinary income taxes plus a 10% federal tax penalty on earnings.
UGMA/UTMA Not applicable.
Parents’ investment account Not applicable.
ROLLOVERS  
CollegeAmerica Yes. Allowed once every 12 months or when you change the beneficiary.
Coverdell Education Savings Account Yes. Allowed once every 12 months.
UGMA/UTMA Not applicable.
Parents’ investment account Not applicable.
* This tax benefit is effective through 2010 unless extended by Congress.
on the College American Account - contribution deductible from state taxes for Virginia residents only.