Claim Education Cr AND Tuition Deduct - for different Monies?


X

xzebra06

In the 2006 case where a below phase-out taxpayer pays
out-of-pocket $14k of qualifying tuition for the same
dependent-student (and all other qualifying rules are met),

can anybody provide an authority for claiming a Lifetime
Credit of 20% x $10k and also claiming a Tuition and Fees
deduction for $4k?, (or any combination), where there is no
double benefit (credit and deduction) for the same expenses.

The applicable IRS pub and most discussions says that the
Lifetime Credit and the Tuition Deduction cannot be claimed
"as a double benefit" in the same year "for the same
individual." However, the meaning of this could reasonably
be interpreted to mean a double benefit "for the same
expenses."

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.

Rereading IRC 222 and 25A, and the regs, there is ambiguity
and the word "expenses" is often used. Also, all examples
are for smaller tuition amounts which seem to imply rules
for a non-duplication of credit/ deduction benefits for the
*same expenses.*

Would appreciate any comments. Okay to tell me if it seems
I'm trying to rewrite the statute too!, but it is not
crystal clear.
 
Last edited by a moderator:
Ad

Advertisements

H

Herb Smith

In the 2006 case where a below phase-out taxpayer pays
out-of-pocket $14k of qualifying tuition for the same
dependent-student (and all other qualifying rules are met),

can anybody provide an authority for claiming a Lifetime
Credit of 20% x $10k and also claiming a Tuition and Fees
deduction for $4k?, (or any combination), where there is no
double benefit (credit and deduction) for the same expenses.

The applicable IRS pub and most discussions says that the
Lifetime Credit and the Tuition Deduction cannot be claimed
"as a double benefit" in the same year "for the same
individual." =A0However, the meaning of this could reasonably
be interpreted to mean a double benefit "for the same
expenses."

A well known financial adviser recently writes that a Hope
or Lifetime credit =A0*can* be combined with the Tuition
deduction - "but not for the same expenses." This =A0is
different than the literal reading of the IRS pub. =A0Now that
I have thought about it, =A0I'm not certain that the financial
adviser is right or wrong.

Rereading IRC 222 and 25A, and the regs, there is ambiguity
and the word "expenses" =A0is often used. Also, all examples
are for smaller tuition amounts which seem to imply rules
for a non-duplication of credit/ deduction benefits for the
*same expenses.*

Would appreciate any comments. =A0Okay to tell me if it seems
I'm trying to rewrite the statute too!, but it is not
crystal clear.
Can it be any clearer than the following from Pub 970?

<< You cannot do any of the following.

Deduct qualified education expenses you deduct under any
other provision of the law, for example, as a business
expense.

Deduct qualified education expenses for a student on your
income tax return if you or anyone else claims a Hope or
lifetime learning credit for that same student in the same
year.

Deduct qualified education expenses that have been used to
figure the tax-free portion of a distribution from a
Coverdell education savings account (ESA) or a qualified
tuition program (QTP). For a QTP, this applies only to the
amount of tax-free earnings that were distributed, not to
the recovery of contributions to the program. See Figuring
the Taxable Portion of a Distribution in chapter 7
(Coverdell ESA) and in chapter 8 (QTP).

Deduct qualified education expenses that have been paid with
tax-free interest on U.S. savings bonds (Form 8815). See
Figuring the Tax-Free Amount in chapter 10.

Deduct qualified education expenses that have been paid with
tax-free scholarship, grant, or employer- provided
educational assistance. See the following section on
Adjustments to Qualified Education Expenses.
 
Last edited by a moderator:

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top