My daughter has decided to drop out of college after 2 years in school. We have monies in both a Coverdell and in our state's 529 plan. Husband is owner of both, with her as beneficiary. We funded the Coverdell from 2003 - 2009 and then let it grow. From 2009-2017, we funded a 529 to take advantage of the state income tax credit. 529 is about 1/3 earnings. I do not know how much of the Coverdell is earnings, as it was transferred from USAA to Victory Capital, and they did not transfer that information, and I don't have any way of going back that far to find it.( I have a rough idea, but am missing a few documents from few years.) My 2020 1099Q from Victory Capital left the earnings box blank.
I would like to roll-over the Coverdell into the 529, so that all monies would be together in the event daughter decides to go back to school. She is investigating religious life and will probably be out of school for a few years or forever. She is 20.
College Advantage (529 Ohio) says that if they don't receive a statement of earnings vs principle at the time of transfer, all monies transferred would be considered earnings. Victory Capital says they can't provide one. This would hurt me in the event of daughter not returning to school and we withdraw the money. This would make the earnings almost 60% of the account if they applied the money this way. I do not have anyone else to give the money to, unless giving it to a niece or nephew is allowed. The Coverdell has about $19,000 in it and probably half is earnings.
Can these monies be donated to a religious order or charity without penalty?
I really don't know how to best proceed to minimize taxes and penalties. Chances of saving it for a grandchild are slim. Any advice would be appreciated.