Retirement tax questions

Hi,

 

Thanks for the response, but I'm not talking about using a car as a qualified education expense.  I fully realize I have to pay taxes on the distribution (unlike if I used it towards tuition), but I should NOT have to pay a 10% penalty per IRS Pub 970 (https://www.irs.gov/pub/irs-pdf/p970.pdf), pg. 54 where it says:

 

===

Generally, if you receive a taxable distribution, you also must pay a 10% additional tax on the amount included in income.

Exceptions. The 10% additional tax doesn't apply to the following distributions:

.

.

3. Included in income because the designated beneficiary received: a. A tax-free scholarship or fellowship grant (see Tax-Free Scholarships and Fellowship Grants in chapter 1);

.

.

Exception (3) applies only to the extent the distribution isn't more than the scholarship, allowance, or payment.

===

 

I received a full scholarship for tuition and room/board.  The tuition portion was $21,549.  I took a $15,900 Coverdell distribution.  I don't think what I took it out for matters as I have to pay taxes on it, I get that.  My distribution isn't more than the scholarship, therefore should I not have to pay the 10% penalty on top of taxes as per what  Pub 970 says?

 

thanks!