Education

I am following most of your answer, but it seems to me the 1093 distribution not covered by expenses may need to be recomputed, assuming this amount assuming this amount is meant to be the Qualifying Educational Expenses (Tuition and related expenses-QEE) used for the AOC.

I agree with the total expenses and the expenses not covered by tax-free scholarships. The resulting amount of 13626 consists of room and board of 9861 and tuition and related fees of 3744 ([social security number removed]-768-1 rounding).  

Applying the 2450 taxable scholarships to R&B, results in R&B 7411 (9861-2450) QEE for 529 purposes and 3744 of tuition and related expenses QEE for 529 purposes = the 1099Q withdrawals of 10975 (7411+3744).

The 3744 would then be available for the AOC as QEE foe AOC purposes and considered as a nonqualified distribution for 529 purposes.  

Assuming this is correct, would it change any of your answers as to posting in Turbo Tax Deluxe?

A second issue I would like to bring up is the correct application of numbers included in 1098-T reporting.  In the past, I have not reported any 1099-Q or 1098-T items on related returns, as it appeared the 529 withdrawals equaled the QEE for 529 purposes. As I have decided to pursue the AOC, the reported amounts have become relevant.  Even if I do not pursue the AOC, I may need some clarification.

IRS Publication 970 says QEE for AOC purposes are made in the current year for the beginning in the current year or for academic periods beginning in the first three months of the following year.  In my case above, (the sophomore year) due to "advanced enrollment", the 1098-T for 2020 included in Block 1 (Payments received for qualified tuition and related expenses) the tuition for the academic period beginning in the following calendar year (2021). Block 5 included in Scholarships and Grants certain scholarships applicable to the amounts in Block 1.  As to a similar "advance enrollment" for Spring 2020, amounts reported 2021 Form 1098-T, included only certain scholarships awarded in 2020 and out-of-pocket expenses paid in 2020 for R&B and required materials when purchased thru the college.

In reviewing, the related Forms 1099-Q and 1098-T for the beneficiaries initial freshman semester. Due to "advanced enrollment" amounts reported on the 1098-T, far exceeded what would have thought to have been qualifying expenses for 529 purposes (out-of-pocket expenses  for the initial Fall semester of the student).

The college is apparently following Form 1098-T guidelines, but I am confused as to how to treat the amounts furnished, principally due to "advanced enrollment amounts" as to amounts available when making withdrawals of QEE from the 529 plan and for AOC purposes.

By way of example, the 2020 1098-Q Block 1 included the Spring  2020 tuition and fees as to the residual of advance enrollment 1281 ( 5531 Tuition and related fees less 4250 related scholarships). As to the Fall 2020 semester it included 5696 Tuition and (due to advance enrollment) included 5551 related to spring 2021 tuition. Total in Block 1 was 11,247 (1281+5696+5551).

Block 5 included for the Spring 2020 semester a 1225 scholarship awarded in Spring 2020, plus out-of-pocket qualifying 529 expenses for Spring 2020. As to the Fall 2020 semester, Block 5 included Fall 2020  related scholarships of 5225+ related known out-of-pocket QEE for 529 purposes. As to the Block 5 for the Spring 2021, due to advanced enrollment , included 4000 in scholarships

for 

In examining the 1098-T for the students freshman year,