Discussion:529 Plan Distribution for People to People Ambassador Program

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Discussion Forum Index --> Basic Tax Questions --> 529 Plan Distribution for People to People Ambassador Program

Discussion Forum Index --> Tax Questions --> 529 Plan Distribution for People to People Ambassador Program

Illini (talk|edits) said:

9 April 2014
Facts....13 year old girl does pre-studies and studies while abroad http://www.peopletopeople.com/ -- it sounds like it was an intense program - parents are emotionally involved in this. Their 529 Plan advisor told them it was OK to use 529 money for this trip abroad for cultural and governmental studies. Good for college credit, blah blah blah. So far all I have received is a Certificate of Completion -- no evidence of college credit or how many college credits it was worth. They withdrew $7,000 for this trip -- covered airfare, buses, hotels, meals, and tours, etc. A) I don't see where airfare counts as a qualified higher education expense. B) They have no 1098-T, but I don't think the college is obligated to send one either (per 1098-T instructions). C) I have no idea if she was at least a half-time student so she could deduct room and board, but I doubt if a two week European vacation with lots of intense "studies" by a 13 year old girl will qualify for much if any college credit. Are these clients being unreasonable to insist I take the expenses against the 529 Plan distribution?

I am proposing putting them on extension, ask them to pay for my services, and go somewhere else to complete the tax return with THEIR signature on it, not mine.

What would you do? Or am I being unreasonable in denying them the QHEE treatment of their $7,000?

Frankly (talk|edits) said:

9 April 2014
The P2P program is a fun thing for kids to do over the summer. My son did that one year. It is essentially a vacation in a group setting with other kids and a few adults to keep control. The "educational" aspect is minimal - really minimal. They might go to a museum or two, get a tour of an archeological site, maybe listen to a politician talk about how the government works. No way is P2P a qualified institution. It's a good and interesting program, but 529 was not designed to fund this kind of stuff.

I'd ask the taxpayer to provide a letter or some evidence from P2P that they are qualified institution and a statement that 529 funds can be used to finance a P2P trip.

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