Education

Thanks for the update.

As to 1113 amount, is there any tax significance to that amount?

As to 3764, was trying to tie-in to the QEE under 529 by showing the portion of the R&B reimbursable under the 529 was net of the amount of taxable scholarship used to pay such amount 7482 (9882-2450) and when added to the 3764 should equal the QEE payable by the 529 plan.

A couple of other comments. The information on the Form 1098-T's I am working with is obviously inaccurate. For example, the 2019 Form 1098-T for the freshmen first semester (Fall-2019) includes in Block 1 (Payments received for qualified tuition and related expenses) the gross tuition charge for the Spring  semester of the following year (2020). Block 5 includes certain scholarships considered applied to the Spring semester tuition.  The college's logic is the the student has advanced enrolled for Spring semester and certain scholarships awarded in during the Spring semester applicable to that tuition should be should be included in Block 5.

The Form 1098-T for 2020 the follows this pattern as to the 2021 Spring semester. However, as to the Spring 2020 Tuition, it includes in Block1 the net tuition from Spring 2020. Thus, when added together Blocks 1 for 2019 and 2020 include the net for Spring 2020 twice.

As applied to the current situation, Block 1 of the 2019 1098-T included 5531 in gross tuition for the Spring semester 2020, and as to such semester included 4250 in scholarships. As to the 2020 1098-T and applicable to the Spring 2020 semester, Block 1 included the tuition net of scholarships applied on the 2019 1098-T 1281 (5531-4250); thus when viewing Block 1's for 2019 and 2020, double reporting the 1281.

Reporting in the 2020 1098-T Block 1 included 5551 gross tuition for the Spring 2021 semester and Block 5 included certain scholarships related to that tuition of 4000.

A question arises as to how to adjust this inaccurate  Form 1098-T for tax reporting.  Assuming the certain scholarships for the Spring semesters (e.g. the 4000 for Spring 2021 1098-T reporting is proper reporting - prepayment counted as 2020 activity: at a minimum, it would appear only that related amount should have been included on Block 1 1098-T reporting for purposes (4000).

In the numbers I reported earlier, for 2020 reporting, I attempted to solve this problem by adjusting 1098-T amounts by removing the Spring 2021 amounts (5551 tuition and 4000 scholarships) and using for Spring 2020 amounts 5531 tuition and 4250 scholarships.

Would the adjustments I used be proper, and if not, what should have been done?

I have a comment on another issue, re the dependency test for support. From prior posts I see you are a proponent of the account owner (versus the beneficiary) being treated as furnishing support on 529 plan distributions, especially when the account owner is the recipient of the distribution.

I found an article titled, Is Your College Student Still Your Dependent? 529 Distributions and the Support Test.

It was apparently published by F.J. Koelle & Assoc. CPA's.  There take was  that it depended on the recipient- to account owner = account owner support, to beneficiary= beneficiary support. There were no authoritative references in the report. They have a blog on facebook, but I'm not sure if anyone asked about authoritative sources.  At least, their opinion matches yours, but authoritative references would have been more convincing.