1099-Q does not exceed expenses

[Snaggletooth]

Client receives a 1099-Q (late of course) from a Coverdell. The amount receive does NOT exceed Educational Expenses paid. No problem there.

However, the expenses paid are also on a 1098-T, and we used them to calculate a Lifetime Earning Credit.

My question, can we avoid BOTH reporting the distribution as income AND also negating the Lifetime Earning Credit??

[ATSMAN]

https://www.irs.gov/credits-deductions/individuals/qualified-ed-expenses

Use the Qualified Expenses For LLC first to calculate that, use the rest like room and board, meal plan, computer, books, internet etc for 1099-Q purpose and see if there is any balance remaining. If yes that is income.

[BP.]

If there is any balance remaining, the income amount is just a prorated portion of the earnings. I like using the formula in TTB.