mattgutz
Level 3
02-21-2022
03:41 PM
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He has $50,000 in a Coverdell but got a full scholarship. He withdrew the total Basis of $22,000 and all that is left are the Earnings. The 1099-Q does not have amounts listed in Box 2 - Earnings or Box 3 - Basis.
Can I allocate the $22,000 distribution to the earnings?
Can I allocate the $22,000 distribution to the earnings?
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TaxGuyBill
Level 15
02-21-2022
03:55 PM
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No, it needs to be prorated.
https://www.irs.gov/publications/p970#en_US_2021_publink1000178474
Don't forget the the taxable portion won't be subject to the penalty due to the scholarships.
