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In anticipation of the upcoming Exempt Org and Texas Franchise deadlines (5/15), we've compiled a list of the most common questions here.
In anticipation of the upcoming Exempt Org and Texas Franchise deadlines (5/15), we've compiled a list of the most common questions here.
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- 529 distributions not used for qualified education expenses
529 distributions not used for qualified education expenses
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nytcpa2012
Level 4
08-26-2021
03:43 PM
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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?
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1 Comment 1
Just-Lisa-Now-
Level 15
08-26-2021
05:09 PM
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If she pulls money from the account she WILL get a 1099Q and you'll enter it in the program, the software will put it where it goes (and compute the penalty on the 5329), I believe it lands on the Other Income line of the return.
♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
