alsn
Level 4

AOC and 529 qualified expenses not calculated correctly in TurboTax Desktop (2021)

Here are the expenses:

Tuition 16,695

Room and Board (Rent) 9,925

529 withdrawal 20,000

 

AOC should use 4,000 out of Tuition expenses and

529 should use remaining expenses i.e. 12,695 out of tuition + 9,925 for rent i.e. 21,920 which exceeds 529 withdrawal with no tax due on withdrawal.

However, TurboTax desktop is saying that some of the withdrawal is taxable. For some reason, I think, it is using 10,000 out of tuition for AOC (instead of 4,000).

 

Any idea?