Doing daughter's taxes; she is grad student, not a dependent.
It appears that she is being taxed for distribution from her 529, (1099Q) even though the distribution was entirely for tuition paid.
1098T box 1 shows the amount paid to the university, $79,045. Box 5 reflects a scholarship, $25,000.
1099Q reflects distribution of $60,533.
TT appears to subtract the scholarship from the amount actually paid to the university, resulting in a taxable portion of the 529 distribution. (on the TT 1099Q form, Line 2c shows an adjusted qualified education expense that nets the scholarship from the amount actually paid, ie $54,046.) I am not able to adjust the amount on line 2c.
I would appreciate any guidance on this!
