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529 withdrawal for high school expense

Highlighted
Level 2

taxpayer used 529 money for high school expense for dependent. It was >than $10k so some is taxable but the taxable portion doesn't transfer to the Other Income worksheet. Why?

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5 Replies 5
Highlighted
Level 15

What is the basis in the amount withdrawn?


ex-AllStar
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Level 2

Distribution $11807, allowed expense $110000, basis $8613, earnings $3193, taxable amount $489 and there should be a 10% penalty.

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Highlighted
Level 2

allowed expense $10000 sorry for the typo

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Highlighted
Level 10

I haven't had to research the new "high school" rules so maybe something addresses this.  In general, 1099-Q forms are issued either to the account owner or to the account beneficiary depending on how the funds were disbursed.  Could it be that the 1099-Q was issued in the child's name/SSN?  If so, I think that would likely make it taxable on the child's 1040.  If not, check your data entry to make sure you're not accidentally marking it as such.

If it's any consolation, I agree with your conclusion!

Rick

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Level 2

When I changed the recipient to the Taxpayer on the 1099-Q Worksheet, the amounts flowed through to all the required forms correctly.  I can't put it on the dependent's tax return as she doesn't need to file one and the penalty needs to be paid somehow.  Thanks all.

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