Q. I believe we won't have any penalty, because we can show her scholarships applied to courses taken in spring 2025?
A. Yes.
Q. I assume that means it will be taxable on my taxes, not my daughter's?
A. Yes. Having the check sent to you, makes you (the owner) the "recipient" of the distribution. The 1099-Q will come to you.
Q. Are only the earnings on the account taxable? Or is the whole check we received taxable?
A. Only the earnings.
Q. What is the basis of the account - the amount rolled into the 529 plan in January? Or the amount originally contributed to the Coverdell plan before we rolled it over?
A. The amount originally contributed to the Coverdell plan. The 1099-Q may indicate the earnings amount in box 2.
See my 2nd reply for more on 529 distributions.
