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Posted by Phil Marti on February 18, 2007, 7:15 am
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> A well known financial adviser recently writes that a Hope
> or Lifetime credit *can* be combined with the Tuition
> deduction - "but not for the same expenses." This is
> different than the literal reading of the IRS pub. Now that
> I have thought about it, I'm not certain that the financial
> adviser is right or wrong.
I vote "wrong." It looks to me like section 222(c)(2)(A)
specifically prohibits this:
"2) Coordination with other education incentives
(A) Denial of deduction if credit elected
No deduction shall be allowed under subsection (a)
for a taxable year with respect to the qualified
tuition and related expenses with respect to an
individual if the taxpayer or any other person
elects to have section 25A apply with respect to
such individual for such year."
Note that the reference to section 25A doesn't talk about
the expenses of the individual, but the individual himself.
Thus it seems clear to me that if you take a section 25A
credit based on A's expenses, you cannot also take a section
222 deduction for any of A's expenses.
Compare this to 222(c)(2)(B), which deals with total
expenses used for different benefits.
--
Phil Marti
Clarksburg, MD
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