mattgutz
Level 3
My client has a full scholarship (much of it taxable as scholarship income).  He withdrew from his Coverdell $20k, and the earnings portion of $15k is taxable.  However, he is getting dinged for an additional $1500 on the Form 5329.  This doesn't seem right but I can not find an exclusion.  Has anyone dealt with a similar issue and might be able to get me over the hump?
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