Are you saying your son received funds in a regular investment account that his grandparents had designated was for his college expenses OR that his grandparents put funds in a Qualified 529 Plan and your son is withdrawing funds from that plan? Can you clarify?
I am assuming that he just received funds in a regular investment account since you indicate he had received a 1099B (he would have received a 1099-Q if he withdrew funds from a 529 College Savings Account.)
If it was a regular investment account he will need to pay tax on the difference between the sale price per share and his per-share cost basis for the stock. His cost basis will be the lower of his grandparents' original cost of the stock or Fair Market Value. Here is a TurboTax Help article that explains this calculation: Basis of Stock Received as a Gift
Here are two links to additional details on tuition and 1099Q, if he taking distributions from a 529 Education Plan. Information on 1099Q
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