1099-Q

[grandmabee]

My first one.  box 1 distribution 40,000 box 2 earnings 15,000.  box 3 basis 25000

spent  8,000 on tuition.  I figure 40,000 - 8,000 (tuition) - 25,000 (basis) = taxable of 7,000 and also subject to 10% penalty.  Goes on line schedule 1 line 8.  Am I figuring this correctly?  TIA

[Lion EA]

I haven't had one this year, but...

I think the taxable part is $8,000 X the ratio of 15000/40000 with 10% penalty on that same amount.

And, can you use Room & Board against his 529 Plan distributions? Books? Etc.

TTB give Qualifying Expenses: Books, supplies, equipment, room & board if at least 1/2 time, computer equipment, software, internet access, related services.

TTB says Tax-free earnings = Earnings X Adjusted qualified education expenses/Total distribution

Taxable earnings = Earnings - Tax-free earnings

So, what TTB says.

 

[grandmabee]

After more research I think you are correct and I will change my thinking.