1099q

[spanel]

Gross distribution $3500
Earnings $1000
Basis $2500

College expenses are $3500 from 1098T

So none of my earnings on the 1099Q are taxable correct?
How much goes on an 8863? $2500 since I have a $1000 tax benefit?

Thanks

Chris

[Maude Lebowski]

Zero. The TP already got the tax benefit because the $3500 came from a 529 Plan (or QTP or Coverdell).

[New York Enrolled Agent]

Zero. The TP already got the tax benefit because the $3500 came from a 529 Plan (or QTP or Coverdell).

I'm not sure it's as simple as that. The 529 and the AOC can be coordinated. The original poster should look at Pub 970, Chapter 8 for a discussion of the coordination.

[RWG1950]

TTB (pp 12-6, 12-7) explains this how this works and also the coordination between QTP withdrawals and education credits.

[ATSMAN]

I typically recommend that they use 1099-Q distributions pay for room and board (including off campus living, subject to limitations) and other expenses that can not be claimed under AOC or LLC. It works out beautifully!