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Subject:  Re: Reporting 529 distributions on taxes Date:  3/20/2008  9:14 AM
Author:  TMFPMarti Number:  99599 of 127616

It's not that TT isn't calculating a taxable portion of the distribution, it is. But since the distribution *was* used to pay for tuition, it shouldn't be taxable at all, right?

Not necessarily. There's no "tracing" of 529 distributions, so to figure if there's anything taxable you have to look at the student's total picture for the year. The process is explained in Pub 970.

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