We have a 529 plan. The 1099-Q shows a $22,450 distribution, $8,800 in earnings, and a basis of shows a basis of $13,650. The 1098-T shows $22,311 received for qualified tuition and expenses. When I did my kids taxes, TT adjusted the qualified tuition and expenses to $12,000 and made other adjustments that resulted in $3,300 of income based on the 529 distribution. I do not understand how TT is calculating this and there is so much income. Following PUB 950 it looks like the income should be around $65. Any ideas?
