I think the rules are that the money can only be used for college but im having trouble finding information online that states whether or not transportation(buying a car to drive to and from college) counts.
also i live with my parents
Related posts:
- What Will College Tax Do If I Have No Job And Have Very Little Money In Savings?
- Should I Put My Money In A Savings Account Or Wait Until College Is Over?
- Where Does A Middle Class Family With No Savings Get Money For College?
- Preparing For College With A Savings Account?
- How Young Was Your Baby When You Started A College Savings?
Transportation does not count. It’s not tuition, room or board.
So if you spend the money on a car, the money is both taxable and subject to a 10% penalty. (This does not apply if it’s a regular savings account, UGMA or UTMA.)
As for a special needs trust, contact the trustee. A very conservative trustee will probably limit you to tuition, room and board.
You need to be more specific with the kind of account you have. However, you will be taxed if it is any kind of tax deferred account such as a 529.