Ok. So this sounds pretty straightforward. Using round numbers, my son's 1099-T has $40K in box 1 and $34K in box 5. So box one is qualified expenses and its larger than the grant, Box 5. So he wouldnt have to report income. BUT, the school also provides a 2nd page on the electronic version of the 1099-T where it itemizes the expenses. The itemized expenses only total $30K. the difference between Box 1 $40K and the itemized expenses of $30K are the room & board expenses. By this understanding, $4K would be Grant $$ that did not pay for allowable education expenses, - Grant $34K less Itemized Expenses = $4k. SO, do I follow the 1099-T Box 1 ($40) and Box 4 ($34K) to determine we don't have income? OR do we take into account the itemized pages of expenses that would then show $4K of reportable income? Does the IRS also get the additional information provided by the school or just the actual 1099-T form? Essential WE know the grant covered more that the allowable expenses but the 1099-T says it didnt. How should we proceed?
