Page 285 - Small Business IRS Training Guides

Answers to Exercises

Exercise 1

Answer: $22,850

The total contribution from others is $14,200 and less than the 2018 annual contribution limit of $15,000. Pat earned
$8,650 which is below the 2018 poverty limit of $12,140 in the continental U.S. Therefore, the total amount that can be

contributed to Pat’s ABLE account is $14,200 plus earnings of $8,650 for a total of $22,850.

Exercise 2

 Yes  No

Jill is not eligible for the Saver’s Credit because she is a full-time student.

Exercise 3

 Yes  No

Tom used a portion of the distribution for his own college expenses and rolled over the remainder to an eligible family

member’s ABLE account, therefore, no portion of the distribution is taxable to Tom.

73233-102 11024/11025-6 Tax Cuts and Jobs Act