529 plan

[don1976]

distribution from 529 plan to pay 10,000 student loan shows up as taxable distribution when paid to owner and not the beneficiary

[Terry53029]

You have to scroll almost to the bottom of the 1099Q worksheet, " computation of taxable distribution" to enter amount paid toward loans

[don1976]

yes I had already done that and all info is entered correctly. The program treats the 529 distribution to payoff a student loan as taxable if paid to the parent vs allowable if paid to the beneficiary. I do not believe this to be correct as i do not see anything in tne IRS publication that would indicate the above. Should be qualified either way in my opinion

[Terry53029]

I've just done one for a client. She took distribution, but beneficiary was her son. I went to bottom of 1099Q worksheet put amount paid towards loan, and none of it showed up as taxable, as it should.