Client has an educational trust set up for his kids. Included in the trust is a Sec 525 plan. This is the first year there were any distributions for the son's education expenses.
Question: How do I handle this?! The 1099-Q came to the trust (with the box checked that says "the recipient is not the designated beneficiary"). I assume that is because the trust is the recipient, and the son is the beneficiary. The Sec 525 plan paid the college directly. If the qualified educational expenses were more than the 1099-Q distributions, do I even report it on the Form 1041?
Would it be any different if the trust made a distribution to the family and they paid the college?
I also assume, if the 1099-Q more or less equals the qualified education expenses, then there are no education credits available on the parents Form 1040.
Any insight would be greatly appreciated!
Question: How do I handle this?! The 1099-Q came to the trust (with the box checked that says "the recipient is not the designated beneficiary"). I assume that is because the trust is the recipient, and the son is the beneficiary. The Sec 525 plan paid the college directly. If the qualified educational expenses were more than the 1099-Q distributions, do I even report it on the Form 1041?
Would it be any different if the trust made a distribution to the family and they paid the college?
I also assume, if the 1099-Q more or less equals the qualified education expenses, then there are no education credits available on the parents Form 1040.
Any insight would be greatly appreciated!