@BrittanyS It's *almost* comical that I'm arguing so persistently for a tax I don't want to pay. But I've yet to be convinced by anything TT has offered by way of explanation. I didn't see anything in the link you referenced about Virginia's treatment of an unqualified distribution, only the federal treatment which I understand.
At savingforcollege.com:
"The principal portion of rollovers and nonqualified withdrawals from this plan are included in Virginia taxable income to the extent of prior Virginia tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability or withdrawals made on account of the beneficiary's receipt of a scholarship."
What I read here is the PRINCIPAL PORTION (not just the gain) is to be INCLUDED in taxable income TO THE EXTENT OF PRIOR VIRGINIA TAX DEDUCTIONS ( we did take Virginia deductions in the year of contributions.)
By the way my caps are for emphasis but not shouting 😉; I'm very grateful for your time, expertise and consideration. I just haven't been convinced.
