Follow up:
Our son is NOT being claimed as a dependent by us.
He is filing single.
We are filing joint/married
We have not filed our taxes yet (important to note, in case we need to claim part of the 529 payments as taxable income. The 529 plan is owned (?) by us)
Our question is about the Lifelong Learning Credit as it pertains to using our 529 plan to cover his grad school expenses.
All of his graduate school expenses have been covered by the 529 plan (tuition, room/board, books). This is more than the $10000 limit set by the LLC (20% of $10K = $2000). Let's just say it was $15000
Question - if all of 2024 Grad school has been paid with the 529 plan (tuition, room, board, books) and he uses the LLC, do we need to claim $2000 of the 529 payment (which are supposed to be tax-free) as taxable income (since you cannot double-dip)?
How do we "report" the $2000 LLC in regards to the $15000 529 plan payment? Is $2000 taxable income and $13000 is "tax-free"?
