Is this correct? QTP income

[Art]

$153.61 of the earnings need to be included on parent’s return as income.

Client has son attending college (4^th year for AOC) and received 1099Q for payments from QEP:

Box 1 Gross Distributions $17,980.63
Box 2 Earnings $ 6,325.69
Box 4 Basis $11,654.94
Box 6 checked
Amounts were not paid to designated beneficiary or college direct, but to Mom who sent payments to college

Total Billings from college $ 28,000.00
Scholarships & Grants 6,456.00
Expenses to take AOC 4,000.00
AQEE 17,544.00

Payments reflected on bursar’s statements:
Paid by ACH/Credit Cards 17,544.00

Other qualifying expenses for classes 523.23
Total amounts paid 18,067.23

Tax-free 17,544/17,980.63 x 6325.69 = 6172.08
Earnings 6325.69- tax free 6172.08 = 153.61

[BP.]

1099Q for payments from QEP: Box 1 Gross Distributions $17,980.63

Total amounts paid 18,067.23

No taxable earnings. Qualified expenses exceed distribution. That's what it looks like to me based on your numbers.

[kamckinley]

No taxable earnings. Qualified expenses exceed distribution. That's what it looks like to me based on your numbers.

I agree. If you add the other qualifying expenses of 523 to the amount billed by the college, your qualified expenses are greater than the distribution. Without the additional expenses, your calculations would be correct.

[Art]

Thanks for the replies. This is the 1st time I have had to deal with this issue.