I removed all education items.
Taxable Income (no change from earlier in the thread): $4,978
Tax Due on income: $483
Self-Employment Tax: $98
Box 1 of the grandparent's 1099-Q: $5,981.50
Box 2 of the grandparent's 1099-Q: $2,048.96
Box 1 of the 1098-T: $6,716.50
Box 5 of the 1098-T: $0
TT came back with the AOC. For the "Used for Credit" field, it seems that putting in $483 (instead of the $3000 that you suggested) to reduce Tax Due on Income to $0 minimizes the Excess Distribution. This minimizes State Tax Income due.
Does this seem to make sense. You had expected the LLC instead of AOC.
