Question
529 distributions not used for qualified education expenses
Client has over $71K in earnings from 529 plans for grandchildren who are not going to college. The other options available to avoid the 10% penalty are not available.
(1) Since she won't receive a 1099Q or Tuition 1098-T, should she be receiving a 1099Misc?
(2) where does she enter the full distribution (close to $95K), or does she just report the earnings?
(3) where does she enter the 10% penalty on the earnings portion ...on Form 5239? Part I, D?
(4) what type of income are the earnings considered? interest, dividends, other income?
