Ok Great answer. Really appreciated. Final Comment -
I'm my real word scenario, I have a 40k IRA withdrawal and 25k 529 withdrawals. I know I can trace 30k of expenses out of my checking account for qualified education expenses which leaves 10k from the IRA in penalty. Based on your answer above, I will not be able to apply any of the 529 withdrawals to cover this 10k this since the withdrawals are reported on my kids' returns. **Correct**?
In addition, the 529 withdrawals are fully qualified and as such there is no applicable kiddie tax. **Correct**?
