@jlar
definition of "incurred"
to come into or acquire (some consequence, usually undesirable or injurious): to incur a huge number of debts. to become liable or subject to through one's own action; bring or take upon oneself: to incur his displeasure.
I don't know what debts or liability the child is taking on unless the fork over rent and meal money to the parents. (or there is a signed contract that the child promises to pay the rent......however, care is to be taken as that is probably taxable income to the parents when paid. Just my two cents.
but here is the broader question, why did you take so much money out of the 529? this situation suggests it wasn't required for college, hence the tax. If you post Box 1 and Box 5 of the 1098T and Box 1 and Box 2 of the 1099Q, I can show you the math. Also, were you able to take the AOTC credit? how much. the whole $2500?????
