Parents receiving 529 Distribution on 1099Q but child paid for tuition

[Tlynncpa]

Parents received 529 Distribution on 1099Q, Child out of the country paid tuition, room and board, books, food and incidentals.  

1.  Is this taxable to anyone if the Graduate Schools is not a qualified school according to the 529 research? If so how to handle?

2. Can the Child (25) receive LLC as is not claimed on anyone's return as a dependent and is filing a US return with W-2 Wages who is filing single for 2024.

3.  Tuition, room and board, food and incidentals are lower than distribution from 529.

4. Tuition is for 2024 and 2025 1/2 and 1/2. 

Thanks, 

[Tlynncpa]

Oh and now 1098 was provided from Grad School.

[AmyC]

First post - not a qualified school

1, Yes. IRS Pub 970 and Can You Use a 529 Plan To Pay for Study Abroad? agree that ineligible expenses must be included in income. Whoever received the income from the 529, includes it on their tax return. 

2. No. LLC is only for qualified education expenses which means to an eligible institution. See  What You Need to Know about AOTC and LLC

3. & 4. All taxable income

Second post - received a 1098-T, sounds like an Eligible Educational Institution - Internal Revenue Service. Verify if it is or is not.

If it is:

1. Only portion beyond 529 qualified Room and Board  and Qualified Education Expenses - Internal Revenue Service would be taxable.

2. Yes, LLC available.

3. Some portion would be taxable.

4. Distribution in 2024 to pay for tuition due the first 3 months of 2025 is not taxable.