Corey and Lee have a daughter Grace, who is five years old, and a son Cole, who is three. They want to contribute $$5,000$ a year to fund each child's future college education. Which statement regarding these funding options is correct?

a$.$ Corey and Lee can each contribute $$2,500$ to separate Coverdell ESAs for Grace and Cole this year, for a total contribution of $$5,000$ for each child.

b$.$ Corey and Lee can redeem $$10,000$ of mutual fund shares, which will not be taxed If the money is transferred directly to a Section $529$ savings plan.

c$.$ Corey and Lee can purchase $$10,000$ of Series EE savings bonds to pay higher education expenses but phase$-$out income limits must be met in the year the bonds are redeemed.

d$.$ Corey and Lee can each make a contribution of $$5,000$ to a Section $529$ savings plan for Grace and Cole, and can take a federal income tax deduction in the year the contribution is made.

Which statement regarding custodial accounts and their taxation is not correct?

A$.$ Under kiddie tax rules, the first $$1,100$ of unearned income is sheltered by the child's standard deduction $ln2021.$

B$.$ UTMAs, which can hold real estate and partnership interests, allow for greater investment options than UGMAs.

C$.$ Money held In a UTMA or UGMA account may be used for any purpose.

D$.$ Assets in UTMA and UGMA accounts can be sold and transferred into Section $529$ savings plans to obtain favorable tax treatment.

Which statement regarding a Section $529$ savings plan is not correct concerning financial aid?

A$.$ If the parent owns the account and the student is the beneficiary, the asset is counted as the student's asset for financial aid.

B$.$ If the student owns the account, the value of the account is included when determining the student's expected contribution amount.

When a grandparent owns an account, none of the assets are considered in the expected family contribution portion of the financial aid calculation.

Distributions from a Section $529$ account owned by a grandparent are treated as student income for financial aid purposes.