Me again.
Pub 970 indicates that in 2009 and 2010, purchase of computer equipment for use at University can be paid with a qualified tuition plan as a qualified expense. The publication has not yet been updated for the 2011 tax year.
What about a computer purchase for a college student in 2011? Can I use a QTP to reimburse this cost and have this distribution be a QEE?
The economic recovery act expanded the definition of equipment to include computer equipment purchased in 2009 and 2010 for the beneficiary and the beneficiary's family for use during the period the beneficiary is enrolled at the qualified college. It has expired. Therefore, one falls back to the original definition of qualified expenses that does not expire. It includes tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution. Equipment includes a computer. Please note that it must be a requirement by the school.
OK. My daughter just started University. In 2009 I purchased a laptop computer for her, and she took it with her to the University. Therefore under Pub 970, this computer is a QEE. However, I did not withdraw the amount of the computer from her QTP in 2009. Can I withdraw this amount this year from the QTP for the computer purchased in 2009 and still count as a QEE, or would the withdrawal from the QTP also have been required in
2009?
It would go on your 2009 tax return, if anywhere.
You may still be able to amend your 2009 tax return.
The withdrawal would have been required in 2009. Otherwise, your 1099-Q will be for the wrong year.
QTP (aka 529 plans) are quite strict about distributions being made in the same year as the expense was paid to avoid any negative tax consequences.
For example, an unfortunate mistake that some make is to take out money late in one year for tuition bills anticipated early in the next year.
Either you aren't understanding my question, or I am not understanding your response.
If possible, I would like to make a withdrawal from my daughter's QTP now (2011) to reimburse me for my purchase of her laptop in 2009, and have this withdrawal be considered a qualified withdrawal. I can make the withdrawal from the QTP to reimburse for the 2009 laptop purchase. The question is would such a withdrawal be considered qualified so that the gain on the distribution would not be subject to taxes/penalties, and can a qualified withdrawal be made now in 2011 for reimbursement of the purchase of a laptop in 2009.
I don't see what amending my 2009 return would do, and beside, the return in question would be my daughter's, as the reimbursement withdrawal would be made in her name, and she had no income or return in 2009.
I was clearly asleep here. I know of no way to do what you propose to do and allow this as QEE either this year or for 2009.
What if you pay a bill in September 2011 for tuition ranging from September 2011 to June 2012? Is that allowed under QTP for 2011? Or do you have to pay the September to December/2011 portion in 2011, and the balance on January/1/2012?
FYI, the 2008 publication 970 (which will be like the 2011 publication
970) is atBeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.