We have two Coverdale ESA accounts which we emptied in 2018 for education expenses for our son the beneficiary. I entered the distribution numbers for each in Turbo Tax. The forms had no earnings or basis information provided. Which, from what I read is ok to not complete in Turbo Tax. They do have a fair market value from the end of the year which is about 30-45% of the distribution which seemed odd as we did not add to these accounts during the year. Turbo Tax indicates these are tax free.
When I added the information for our 529 Wisconsin EdVest distribution (also used for 100% qualified education expenses) Turbo Tax indicates the earnings portion is taxable. The sum of the ESA and 529 distributions are less than half our 1098-T statement of qualified education expenses . The net balance in the account at the end of the year Why would the earnings be taxable? Is it possible I'm answering a qualifying question wrong?
It says the student beneficiary must claim this amount as taxable. If the parents are claiming all the qualified student expenses - how and where would the student claim this amount?
Thank you
