Thank you. Yes, it is indeed complicated and I would like to add another complication for you to consider.
Total qualified expenses (all rounded) are $50,000
Paid from Grandfather's 529 20,000
Paid by uncle 5,000
Paid from grants and scholarships 15,000
Paid by parents from 529 - Used for AOC 10,000
Qualified expenses to be used against 1099-Q Zero
Since the parents took the $10,000 they paid for the American Opportunity Credit and all other expenses were paid by others, the student has no remaining qualified expenses. There are 2 1099-Q's, one from the grandfather's 529 and one from the parent's 529. Since the parents used the $10,000 for the AOC, is it only the parent's 1099 - Q that the student needs to pay tax on the 529 earnings?
