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education expenses, and distributions used for certain medical
expenses. Sec. 72(t)(2)(A), (B), (E).
Higher Education Expenses
Petitioner argued at trial that tuition and fees paid to
Randolph-Macon Academy on behalf of his son are qualified higher
education expenses and, therefore, the additional tax does not
apply to the IRA distributions pursuant to section 72(t)(2)(E).
This issue turns on whether Randolph-Macon Academy is an eligible
educational institution as defined in section 529(e)(5).
Qualified higher education expenses include tuition, fees,
books, and supplies. Sec. 529(e)(3). The expenses must be for
education furnished to the taxpayer, the taxpayer’s spouse, or
any child or grandchild of the taxpayer or the taxpayer’s spouse.
Sec. 72(t)(7)(A). Furthermore, the education must be furnished
at an eligible educational institution. Secs. 72(t)(7)(A),
529(e)(3). Section 529(e)(5) defines “eligible educational
institution.”
(5) Eligible educational institution.-- The term
“eligible educational institution” means an
institution--
(A) which is described in section 481 of the
Higher Education Act of 1965 (20 U.S.C. 1088), as
in effect on the date of the enactment of this
paragraph, and
(B) which is eligible to participate in a
program under Title IV of such Act.
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