Rollovers In Coverdell Accounts
Like IRA accounts, the Coverdell account funds can only be rolled over once a year. They can be transferred at will for the benefit of the same beneficiary. However, unlike IRAs, a Coverdell account can also be rolled or transferred to another qualified member of the taxpayer’s family (as defined in § 152(a), same as relationship test for dependents) who is between the ages 0 and 29.
Military Death Gratuity May be Rolled to Coverdell Accounts
A military death gratuity and amounts received under the Service members' Group Life Insurance (SGLI) program may be rolled over to a Roth IRA or Coverdell education savings account without regard to the Roth or Coverdell contribution limits that otherwise apply. (Code Sec. 408A(e) and Code Sec. 530(d)(9)).
The rollover must be made no later than one year after the date on which the military death gratuity or SGLI payment is received. The maximum amount that can be contributed to a Roth IRA or Coverdell Savings Account is limited to the sum of the military death gratuity and SGLI payments that the individual receives.