Hi all. Here is a rundown of the situation I need help with. Can't make sense of it myself and I'm getting conflicting opinions from the tax pros / people involved.
My wife attended school this year, and received a 1098-T with $17,000 of qualified educational expenses. $13,000 of these were covered by 529 withdrawals made by my mother-in-law (MIL). My wife was the beneficiary of the 529, but my MIL was the account holder. There was a 1099-Q issued to my MIL and her SSN reporting the $13,000. My wife and I are filing jointly, and she is not able to be claimed as a dependent on my MIL's return.
I would very much like to claim the $4,000 of expenses that weren't covered by the 529 withdrawals for my wife's Lifetime Learning Credit. Can I do that? Who files the 1099-Q? Who files the 1098-T? My assumption is that my MIL could file the 1099-Q and 1098-T to show the withdrawal was covered by qualified expenses, and that my wife and I would file the 1098-T and just claim the $4,000 as qualified for the credit - this avoids all 'double dipping.' My tax pro is saying there can be no splitting of the full amount, and either my MIL or my wife must file both the 1098-T and 1099-Q (and that it should be my wife).
Any help is very much appreciated. Thank you in advance.
