a. Abby has a distribution of $10,000 from a qualified tuition program, of which $3,000 represents taxable earnings. The funds are used to pay for her daughter’s qualified higher education expenses. How much of the $10,000 distribution is taxable to the daughter?

b. During 2010, Henry (a single taxpayer) has a salary of $85,000 and interest income of $4,000. Calculate the maximum contribution Henry is allowed for an educational savings account.