Grandparents (owners) had started a 529 plan many years ago. Grandchild beneficiary is now in college
Parents of the dependent child qualify for the full AOC.
($11,168 tuition and fees) ($ 3,788 room & board) ($11,020 gross 529 distribution) ($ 4,000 to AOC)
($ 3,510 529 plan earnings) ($ 7,511 529 cost basis)
$ 3,510 earnings x $ 10,956 AQEE / $ 11,020 distribution = $ 3,490 tax free 529 earnings ( $ 20 taxable 529 plan distribution earnings )
Assuming I have calculated this correctly, TTB pp 12-6 seems to say under "who is taxed" that if the distribution is made directly to the school for the qualified tuition & fees, no one reports or gets taxed on the distribution's taxable earnings. Am I reading this right ?
Thanks for comments
Parents of the dependent child qualify for the full AOC.
($11,168 tuition and fees) ($ 3,788 room & board) ($11,020 gross 529 distribution) ($ 4,000 to AOC)
($ 3,510 529 plan earnings) ($ 7,511 529 cost basis)
$ 3,510 earnings x $ 10,956 AQEE / $ 11,020 distribution = $ 3,490 tax free 529 earnings ( $ 20 taxable 529 plan distribution earnings )
Assuming I have calculated this correctly, TTB pp 12-6 seems to say under "who is taxed" that if the distribution is made directly to the school for the qualified tuition & fees, no one reports or gets taxed on the distribution's taxable earnings. Am I reading this right ?
Thanks for comments
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