Ok, reading through all the answers and updating my figures for the full year expenses, I have 69,380 in QEE. If I subtract out 4,000 to get the full 2,500 AOTC, that leaves 65,380. The scholarship was 29,275. Since the tuition portion was around 45,000 of the QEE, can I assume the entire scholarship amount is tax free?
Assuming the scholarship is tax free, that leaves 36,105 of expenses. My 529 distribution box 1 was 66,294, so that means it is 54.5% tax free and 45.5% taxable. My 529 earnings box 2 was 40684.59. So the taxable income on that would be 18,511 (40685 * 0.455). So I can put that 18,511 on my son's tax return and pay the necessary taxes on that.
Please let me know if the above is correct. Your prior answers have been extremely helpful!
