Distributions for qualified education expenses
(A) In general
(A)In general#
No amount shall be includible in gross income under paragraph (1) if the qualified education expenses of the designated beneficiary during the taxable year are not less than the aggregate distributions during the taxable year.
(B)Distributions in excess of expenses#
If such aggregate distributions exceed such expenses during the taxable year, the amount otherwise includible in gross income under paragraph (1) shall be reduced by the amount which bears the same ratio to the amount which would be includible in gross income under paragraph (1) (without regard to this subparagraph) as the qualified education expenses bear to such aggregate distributions.
(C)Coordination with American Opportunity and Lifetime Learning credits and qualified tuition programs#
For purposes of subparagraph (A)—
(i) Credit coordination The total amount of qualified education expenses with respect to an individual for the taxable year shall be reduced— (I) as provided in section 25A(g)(2), and (II) by the amount of such expenses which were taken into account in determining the credit allowed to the taxpayer or any other person under section 25A.
(ii) Coordination with qualified tuition programs If, with respect to an individual for any taxable year— (I) the aggregate distributions during such year to which subparagraph (A) and section 529(c)(3)(B) apply, exceed (II) the total amount of qualified education expenses (after the application of clause (i)) for such year,
the taxpayer shall allocate such expenses among such distributions for purposes of determining the amount of the exclusion under subparagraph (A) and section 529(c)(3)(B).
(C)(i)Credit coordination#
The total amount of qualified education expenses with respect to an individual for the taxable year shall be reduced—
(I) as provided in section 25A(g)(2), and
(II) by the amount of such expenses which were taken into account in determining the credit allowed to the taxpayer or any other person under section 25A.
(C)(i)(I)#
as provided in section 25A(g)(2), and
(D)Disallowance of excluded amounts as deduction, credit, or exclusion#
No deduction, credit, or exclusion shall be allowed to the taxpayer under any other section of this chapter for any qualified education expenses to the extent taken into account in determining the amount of the exclusion under this paragraph.