Hi...there are several threads on this subject and unfortunately I still have questions on how to handle this. My son received a 1099Q from the mutual fund company for an education savings account we opened on his behalf. He is the beneficiary on the 1099Q (his TIN number is listed on it). The amount in box 1 (gross distribution) was $11,300.00. Coverdell ESA has an X....fair market value is 0.00. The 1098T has 17250.00 in Box 1 and $3750.00 in Box 5 (scholarship).
Based on what I have read in this forum I added the 1098T on my tax return as he is my dependent. I also created a tax return for him to add the 1099Q but he has no income so when I did his tax return he has not tax liability federal or state. All the funds from the Coverdell ESA were used to pay tuition for the first semester. I am confused as to how the IRS is going to be able to match the 1099Q and 1098T's...do I file a zero tax return for him? Do I include the 1099Q on my return? (parent tax return).
feedback welcomed and appreciated
