Box 1 1098-T : $11,247. I think this amount has to be adjusted, as it includes tuition for the spring semester of the following year (2021). Using the spring semester of 2020 in its place, the figure would be $11,247.
Box 2 1098-T: $10,450. Using the logic for adjusting Box 1, this figure would be $10,700.
Box 5 1098-T: Does not include 529 payments.
Box 1 1099-Q: $10,975
Box 2 1099-Q: $3,794
Room and Board Paid: $9,861
Other QE not included in Box 1 1098-T: $768
According to my calculations, if all of the scholarships were applied to Tuition, $1,294 would be available for the AOC ($11,227-$10,700+$768). I have verified that at least $2,450 of scholarships is unrestricted. Applying that amount to room and board, would result in $3,744 available for the AOC ($1,294+$2,450) and $2,450 in taxable scholarships for the beneficiary.
Any information you can furnish on proper entries into to Turbo Tax would be appreciated.
I see the end result as the account owner (distributee) being taxed on the earning portion of the nonqualifying distribution (assuming $3,744 used for AOC = $3,744x($3,794/$10,975). As to the parents return, it appears the $3,744 would be available for the AOC subject to MAGI limitations and other requirements. It appears the beneficiary's return will have $2,450 in taxable scholarships and potentially be subject the Kiddie Tax.
Please advise.
