@Hal_Al
First off, thank you for your time.
After entering the information in the student's filing, I have the following questions:
Question 1:
Why is the amount $11,765 used in the QTP distribution calculations below, considering that the total ESA withdrawals were $13,765?
This leaves $7,031 ($3,213 + $1,527 + $6,291 - $4,000 = $7,031) for the QTP distribution.
$7,031 / $11,765 = 59.76% of the distribution is qualified.
40.24% is non-qualified.
0.4024 × $6,000 = $2,414 of the earnings is taxable (on his return, since the 1099-Q was issued in his name).
Question 2:
Could I have entered something incorrectly? It appears that the earnings are not being factored into the calculations, as the taxable amount remains $2,897 regardless of the earnings I enter.
Background Information:
When entering the 1099-Q information, it seems that the earnings amount is not influencing the final calculations, leading to a fixed taxable amount of $2,897. (Note: I am entering 11765 as the Gross Distribution value, due to it being used in the calculations, see Question 1)
Observations:
- It is somewhat confusing that, when entering student expenses, the system labels them as "Non-dependent student expenses."
- The following expense amounts were entered:
- Tuition: $3,213
- Room & Board: $2,291 ($6,291 - $4,000)
- Computer & Other Expenses: $1,527
Question 3:
It appears that the Kiddie Tax will apply—should this be expected?
Thanks again for your time.
