ESAs predate 529 plans. As such, there was no requirement for the administrator to keep track of those numbers. It's up to you to do that.
Q. What should be done if the contributor has no records of contributions?
A. Do the best you can so that the entire distribution is not treated as earnings. You should have some idea how much you put in, that's your original basis. If you've taken previous year distributions, use a ratio. See example below.
Q. How should this be reported if some of the distribution was used for a qualifying expense and some was not?
A. In the TurboTax (TT) interview, you report the distribution and you report the qualified expenses. TT calculates the taxable portion and reports it on line 8z of Schedule 1. TT will prepare a worksheet for your records, but the actual calculations are not sent to the IRS. If the 10% penalty applies, TT will calculate that on form 5329.
Example:
You put in $20,000 over the years. In 2021, you took out $5000 and had a year end balance of $30,000.
20,000/(30,000 + 5000) = 57% is basis, 43% is earning. 43% x $5000 = $2150 of your 2021 distribution was earnings.
