Misc educational credit?


L

logan1453

I'm reading through Pub 970, specifically the Qualified Expenses
description. I see that "supplies and equipment" fees may qualify, as
long as they are must be paid as a condition of enrollment. I am
looking specifically at the Lifetime Learning credit.

In my situation, I had to pay a mandatory $3,000 fee for equipment
rental, as part of a post-graduate training program. The issue is,
the training program entails taking academic courses, as well as
treating patients in a clinic. The academic courses do actually have
course titles, whereas the clinic time is not really a "course" (e.g.
it does not show up on my academic transcript, does not have a course
title). Since the $3,000 fee is not used for the academic courses,
but rather the "non-course" clinical component of training, am I not
allowed to claim the expense? Or can I consider the entire
"program" (academic courses plus clinic training) as an educational
entity, and the $3,000 equipment fee as part of my educational
expense? Per the tax code, this rental fee is "a condition of
enrollment or attendance". In fact, the director specifically stated
that if we do not pay the fee on time, they would not issue us our
dental specialty certificates.
 
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G

Gene E. Utterback, EA, RFC, ABA

logan1453 said:
I'm reading through Pub 970, specifically the Qualified Expenses
description. I see that "supplies and equipment" fees may qualify, as
long as they are must be paid as a condition of enrollment. I am
looking specifically at the Lifetime Learning credit.

In my situation, I had to pay a mandatory $3,000 fee for equipment
rental, as part of a post-graduate training program. The issue is,
the training program entails taking academic courses, as well as
treating patients in a clinic. The academic courses do actually have
course titles, whereas the clinic time is not really a "course" (e.g.
it does not show up on my academic transcript, does not have a course
title). Since the $3,000 fee is not used for the academic courses,
but rather the "non-course" clinical component of training, am I not
allowed to claim the expense? Or can I consider the entire
"program" (academic courses plus clinic training) as an educational
entity, and the $3,000 equipment fee as part of my educational
expense? Per the tax code, this rental fee is "a condition of
enrollment or attendance". In fact, the director specifically stated
that if we do not pay the fee on time, they would not issue us our
dental specialty certificates.
You've posted this question, and/or several versions of it, on this NG and
at least one other (misc.legal.moderated) and gotten quite a few answers
already.

I appreciate your desire to get the "right" answer and I'll give you my
opinion shortly, but I want to remind you a few things first, these are
things that many posters here don't realize:

1 - even though many of us who answer here are professionals, without all
the details of your situation you cannot be sure you're getting the right
answer BECAUSE we don't have access to all the information;

2 - you can't rely on what we tell you as authoritative, only The Code and
Regs do that. So even though we'll tell you what we think, we are not
always right (though once I did think I was wrong, but it turned out I was
mistaken about that!);

3 - any answer you want to rely on is going to require that you pay for it -
I, and many others here, do out best to answer questions as best we can, but
you can't really expect us to pony up legal citations and research in detail
for free.

4 - in your situation, I'd recommend that you go see a tax pro. YES, you'll
have to pay. However, my take about you (from reading the number and
context your posts) is that you are likely to ALWAYS second guess whatever
you decide.

5 - While I applaud your diligence in trying to get the right answer, keep
in mind that I can't teach you in 30 minutes what its taken me 30 years to
learn.

Now, my answer -

Your expenses, including your tool fee, which is an expense the school
requires of you to allow you in the program, should count toward ONE of the
educational credits or the deduction. Which one, who knows - depending on
your total situation one may be better for you than the other and without
doing your entire return no one here, not even me, can tell you which one to
use.

My best guess is that you'll either use the Lifetime Learning Credit OR the
Tuition and Fees deduction. I don't imagine you qualify for the HOPE credit
since that is for first and second year students and based on your doing
graduate level work you couldn't possibly be a first or second year student.
I have no idea at all about the American Opportunity Credit and YOUR
situation, but I'd guess that you'd likely be better served by one of the
other options. My basis for this is based on almost 30 years in this
business and my gut instinct about what I've seen.

Go see a tax pro, pay the few dollars and know your return is right,
Gene E. Utterback, EA, RFC, ABA
 

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