Daniela and Manuel (marginal tax rate 22%, AGI $120,000) established a 529 account for their son Danilo. It has a balance of $20,000. They paid $4,000 for tuition for Danilo's first year at his eligible university using the 529 account and they also claimed the American Opportunity Credit for these expenses. What is the total net tax benefit they will receive from using the 529 account and claiming the AOC? Assume the distribution consists entirely of earnings on investments.

Answer rating: 100% (QA)

To calculate the total net tax benefit Daniela and Manuel will receive from using the 529 account an... View the full answer