After re-reading my post, I think I need to make one clarification regarding the cost and payment breakout I provided. Here goes...
B) Include only the portion of the 529 distributions that went toward qualified higher education expenses as defined in the instructions for Form 8815 (tuition and fees... but not room and board). Under this option, we would enter $9000 on Line 3... which would mean that we would be eligible for the higher ed inclusion.
Here's the breakout of costs and payments for this option:
- Tuition and Fee Costs ($17,000):
$8000 $4000 out of pocket- $4000 from I Bond sale
- $9000 from 529 distributions
- Room and Board Costs ($12,000)
- $12,000 from 529 distribution
