1099Q Coverdell ESA 1099T

Forum|Forum|6 years ago
March 31, 2020
1 reply
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I have several questions on 1099Q and college education costs.

I received the 1099-Q form from my brokerage for the Coverdell ESA account, showing:

Recipient's TIN: my child's SSN

(addressed to

"me

FBO my child's name")

box1: gross distribution amount, which equals to the amount I sent to my child's medical school.

box 3: Basis: blank

Fair market value: 0.00

distribution code: 1

Before I entered 1099-q and education cost information, I owned (married filing jointly) IRS ~$800. After I entered 1099Q info, I owned IRS ~$5000. After I entered the education cost, now I own IRS ~3000.

Now my questions:

1. Who is the recipient of the 1099Q, me or my daughter?

2 Should I enter both 1099Q and 1099T info into MY return?

3. Is it necessary to track down my transaction history to calculate the basis of the Coverdell ESA account, and entered it to the 1099Q section in TurboTax, instead of entering 0?

4. All the distribution goes to medical school, Why I ended up paying more taxes?

Thanks,

JohnB5677

The recipient is your daughter, but this gets complicated. You received the check (It would be better to have it sent directly to the school). That is why it is on your tax return.

Yes, you should post the 1099-T along with all of the other lodging, food, books and other fees not listed on the 1099-T. This will offset most if not all of the 1099-Q distribution.

At this point you do not have to total your transaction history. I think your daughter's expenses will take care of it.

I understand that the distribution went to the medical school. But from the IRS's point of view, you got the check. You now have to document how it was spent.

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fkzAuthor

Thank you for your reply. One thing i do not understand is why I end up owing irs much more after I entered the 1099q and 1098 t information. Do I have the option not to enter either of them? Maybe it’sDue to my income level?

Thanks,

Steven