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Posted by A.G. Kalman on July 23, 2007, 1:17 am
Please log in for more thread options goodfella wrote:
> My daughter obtained student loans on her own and attended a
> state university where she got her degree in 2007. Using
> Turbo Tax, I did my income taxes but I didn't included her
> tuition payments (1099t) as a deduction since although we
> were claiming her as a dependent, I didn't pay for her
> schooling. She came home last spring and told me that I
> could use the tuition that she paid as a deduction on my
> income tax. Some friends of hers at school said their
> parents were able to take the deduction.
>
> I called the IRS, explained the situation honestly, and
> they indeed said I could take the deduction since she was my
> dependent. I filed a 1040x and used incorrect verbage about
> why I amended my tax return. I wrote that I amended the tax
> return because I didn't claim the continuing education
> credits instead of the tuition and education credits. They
> kicked it back saying they needed form 8863 as backup for
> the continuing education credits. I called the IRS again to
> ask another question and in passing asked about claiming my
> daughter to make sure I could claim her. The IRS person
> looked up the information and said I COULD NOT claim my
> daughters tuition as a deduction. I pulled up the tax
> publication on the internet and read the information myself
> online and it is pretty clear that I cannot claim my
> daughters tuition.
>
> My qustions are
> 1) Is there any way that I can claim her tuition
> 2) Why does the IRS allow the Hope credit to be claimed
> but not the tuition?
Assuming there are no issues with claiming the child as a
dependent, there are two tax benefits available for higher
education expenses for a student who is not a freshman or
sophomore: Lifetime Learning Credit or a Tuition Deduction.
You can claim one or the other (not both) if you meet the
eligibility requirements. There is one big difference
between the two. The Lifetime Learning Credit has a rule
that allows you to claim the credit even if your dependent
child paid the tuition and fees. The tuition deduction does
not have this rule. In other words, if your child paid the
tuition and fees and the child is your dependent, then no
one can claim a tuition deduction.
You need to see if you meet the eligibility requirements for
the Lifetime Learning Credit as it doesn't matter whether
you paid or your child paid the tuition and fees. You are
allowed to consider his payment as if it was made by you.
The requirements are in Pub 970.
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