Withdrawals for higher education expenses

[Guest bmurphy]

In Pub. 590 the IRS deifinition of Qualified higher eduication expenses includes "equipment required for the enrollment or attendance of a student at an eligible educational institution". Is there any more clarification on what the term "equipment" includes? Have a client who needs to take an early withdrawal from his IRA. In addition to tuition, part of the withdrawal is going towards payment on a car that is needed to get to & from college. I would think that the car potion wouldn't get the 10% penalty exception but am not sure. Any thought/comments would be appreciated.

[Guest Derelict]

I would not think the car expenses would be applicable as it is not required.

Cite:

529(e)(3)

(3) Qualified higher education expenses

        (A) In general

          The term ''qualified higher education expenses'' means -

            (i) tuition, fees, books, supplies, and equipment required

          for the enrollment or attendance of a designated beneficiary

          at an eligible educational institution; and

            (ii) expenses for special needs services in the case of a

          special needs beneficiary which are incurred in connection

          with such enrollment or attendance.

        (B) Room and board included for students who are at least

            half-time

          (i) In general

            In the case of an individual who is an eligible student (as

          defined in section 25A(b)(3)) for any academic period, such

          term shall also include reasonable costs for such period (as

          determined under the qualified tuition program) incurred by

          the designated beneficiary for room and board while attending

          such institution.  For purposes of subsection (b)(7), a

          designated beneficiary shall be treated as meeting the

          requirements of this clause.

          (ii) Limitation

            The amount treated as qualified higher education expenses

          by reason of clause (i) shall not exceed -

              (I) the allowance (applicable to the student) for room

            and board included in the cost of attendance (as defined in

            section 472 of the Higher Education Act of 1965 (20 U.S.C.

            1087ll), as in effect on the date of the enactment of the

            Economic Growth and Tax Relief Reconciliation Act of 2001)

            as determined by the eligible educational institution for

            such period, or

              (II) if greater, the actual invoice amount the student

            residing in housing owned or operated by the eligible

            educational institution is charged by such institution for

            room and board costs for such period.