@Hal_Al wrote:A. You're going to need to figure out the cost basis and "earnings" amount. The TurboTax interview does help, but you still have to come up with the inputs. Note: unlike the more modern 529 Plans, the ESA administrator was not required to track your cost basis/earnings (gain).
Thanks for your help. So after some back-and-forth with Vanguard, even though they don't track the cost basis, I was able to get a report with the entire transaction history on the account, and using that I calculated the cost basis. However, I still have another question.
As it turns out, the balance in the account that was left when I withdrew it was less than the contributions that were made over the years. I calculated it as follows (approximate numbers):
- $28,000 in total contributions over the years
- $24,000 withdrawn from the account in 2023
- $0 account balance at the end of 2023 since it was all withdrawn
Therefore, 28,000/(0 + 24,000) ~= 116% basis. So am I correct in assuming that none of the distribution is considered earnings, and therefore I just pay the penalty for non-qualifying expenses and don't pay any capital gains tax?
And in the TurboTax 1099-Q section, how should I enter this information, since the basis totals to >100%? Thanks again for your help.
