100% of the withdrawal went toward my daughter's tuition. Her school's 1098-T "payments received" number matches the fund's 1099-Q gross distribution number. Shouldn't it be a wash?
1099-Q (sent to dad who pays tuition)
- Box 1 Gross Distribution: $5000
- Box 2 Earnings: $1500
- Box 3 Basis: $3500
1098-T (sent to daughter from her college)
- Box 1 Payments received for qualified tuition: $5000
TurboTax is taxing the 1099-Q earnings number. (which I feel is incorrect). As far as I know, I properly answered every question and expected the two transactions to offset each other.
Thanks in advance.
