72t exception for QHEE
Scenario:
Parent has a child who is attending a qualifing institution for college. Child has student loans paying tuition only. Student loan checks are being cut directly to the college. Child is living off campus. I understand that the parent can withdrawal person IRA assets to cover the books but can she also use IRA assets to cover living expenses for the child?
Permalink Submitted by Alan - IRA critic on Fri, 2014-07-11 19:13
If the child is at least a half time student as defined by the college, room and board are included as QHEE. See 529(e)(3) here: http://www.law.cornell.edu/uscode/text/26/529. Note that room and board amounts for students living off campus can be provided by the school. But room and board will not include all living expenses incurred. Form 5329 will have to be filed to claim the IRA distribution penalty waiver by entering the exception code for higher education expenses.