My expense breakdown looks something like this:
$11000 tuition to full time school (from 1098-T)
$2000 tuition to other school (no 1098-T received)
$400 books
$13400 total
And then payments:
$2000 scholarship
$11250 from 529 plan
I have been reading that I can choose how to allocate expenses, so we paid $11250 toward total expenses of $13400. That leaves $2150 we didn't cover. And then the scholarship. It sounds like you're saying we cannot choose to allocate things this way?
If there were no scholarship then with $11250 paid from the 529 we'd have $2150 left over for the AOTC. With the scholarship I've been reading you can take out the amount of the scholarship as taxable income from the 529. Is that not true then if you are using the AOTC?
