@krk3384 - please read the last point of @Hal_Al's post closely! who has to report the 1099-Q is often misunderstood! - whomever receives the money is who reports the 1099-Q - not who owns the 529. the recipient's SS# will be on the 1099-Q.
from @Hal_Al :
* For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q.
The 1099-Q gets reported on the recipient's return. The recipient's name & SS# will be on the 1099-Q.
so one strategy is to make sure the distribution from the 1099-Q is paid directly to the school as your son is probably in a lower tax bracket than you. Only the 'earning' on the 1099-Q (Box 2) is potentially taxable. Remember the room and board are good expenses to be paid by the 529 as they are not qualified expenses on the 1099-T.
and I think it was mentioned somewhere on this thread, you could always maintain the money for grad school ...... or future grandchildren......
