Hal_Al
Level 15

Education

 The treatment of expenses paid with distributions from Sec. 529 plans and Coverdell ESAs in the support test is uncertain because of the dual nature of these college savings vehicles and a lack of IRS guidance. The consensus among tax experts is that it is parental support, because the parent is the owner of the plan.  It would be helpful to make distributions to the owner, not the beneficiary or school, if you are trying to claim her and to the beneficiary or school, if you want her to claim herself. But, neither is a guarantee. 

 

References:

https://www.savingforcollege.com/articles/the-impact-of-529-plans-on-claiming-a-dependent

http://www.aicpa.org/publications/taxadviser/2010/august/pages/nichols_aug-2010.aspx

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