As for the standard deduction for a dependent, I’ve only read that dependents may deduct up to earned income + $350, and it would make sense that if income was $11,650 or more then s/he would claim the full allowable 12k standard deduction. I see here that unearned income in the form of taxable scholarships may also be “part of this deduction”, although really unearned income.
It matters if a student is a tax dependent or not as it would be the student’s income (not the parents’) to determine if income eligible to be AMT exempt, to claim education tax benefits such as the ATOC, who claims the dependent credit or not, etc.
Has this been addressed here with a result?..For 2018, is the IRS verbage still vague on 529 withdrawals for the student support test? One IRS doc considers a 529 deposit as a “completed gift”, yet other 529 rules leave the account holder as the “owner” to retract the “gift”. Which is it??