Jennie receives $12,000 (of which $2,000 is earnings) from a Qualified Tuition Program. She uses the funds to pay for new furniture for her apartment. What amount is taxable to Jennie?

Question

Quizplus · Accepted Answer

The $2,000 earnings portion of the distribution from the Qualified Tuition Program is taxable to Jennie because she used the funds for non-qualified expenses (new furniture for her apartment instead of education-related expenses). The principal amount of $10,000 is not taxable.

Jennie Receives $12,000 (Of Which $2,000 Is Earnings) from a Qualified