529 PLAN ON 1099 q DISTRIBUTION PRO SERIES IS TAKING THE TOTAL DISTRIBTION AWAY FROM QUALIFIOED EDUACTION EXPENSES. SHOUDLN'T ONLY BE THE EARNINGS. THE PROGRAM IS NOT CONSIDERING THE BASIS . SO WOULDN'T TH BASIS BE QUALIFIED EDUCTION EXPENSES , IF USED FOR EDUCATION
First - quit shouting.
Now think this through. How can money, that was set aside, be an expense? Think of the definition of "expense." Is money in a savings account an expense?
Sorry was on cap lock, not shouting. Someone set aside money in a 529 plan. Say 5000 , in ten years it grows to 12,000 for exaample. The entire account is used for eduaction expenses of the beneficiary. I would think you woudl only have to exclude the earnings of 7500 from whatever you pay out in eduaction expenses. In this example exclude the 7500 in earnings. But if you paid out 12500 total in education expenses , I would think the original basis 5000 should be eligble for educatin credit or deduction.
I'm sorry, but I can't follow your logic. Forget for a moment that it's a 529. If you put $5000 in a savings account or under your mattress, and then take it out to pay for education, how can you claim a credit for it?
If a person used $5,000 that they saved under their matress to pay for educational expenses, they could claim a credit if all other items were acceptable. It would be no different that writing a check for the educational expenses. Check or Matress Savings would qualify for the deduction if all other criteria were met
I agree. Pro series was reducing the allowed eductaion expenses by the entire distribution from the 529. I changed it to make it only reduce by the earnings in the 529. Therfore allowing a deduction for the basis in the 529 Just wanted to get some consesus on this.
Thanks
the software does not figure this correctly in all cases--1099Q distributions get misapplied--need to find taxiowa response to earlier post/discussion
sure i posted this -but seems to have dissappeared
https://community.intuit.com/posts/education-credits-wont-calculate
