Hi,
That last update made much more sense to me - it was what was missing from the prior responses.
The Scholarship is $37000 and I added the additional $37000 to the expenses and now the tax numbers match what I had calculated they should be....
Final question (sorry).
'If her income from working was less than $14,600, she can declare some of her scholarship as taxable to reduce the amount of the 529 distribution that is taxable and subject to the kiddie tax.'
Her Scholarship is $37000 - and on her Return she is currently only reporting the tuition from the 1098-T. (I paid Room and Board on my return).
Are you telling she could do something like. (assume she has other earned income of $2000).
Report that $12600 of the Scholarship was spent on Room and Board Expense (making it taxable)
Report that $24400 of it was spent on Tuition?
Is it really allowed to shift the expenses like that to avoid part of the Kiddie tax?
I would be concerned since I am also claiming I paid her Room and Board on my Return - But I guess I could simply reduce my Room and Board part by $12600 and increase the Tuition part on my form by that $12600 instead.
