Lucho Posted February 24, 2009 Report Share Posted February 24, 2009 A married couple's daughter got a 1098-T $17,000+ in box 5 and a qualified billed tuition amount of $22,000+ in box 2. and couple's total income for the year $35,000. considering this situation, the student should file claiming her exemption reporting the scholarship and the tuition expense; and the parents filing not claiming her as dependent. Parent want to claim her as dependent, but the amount of the scholarship and parent's income dos not support as for parents proof of providing more than half of student expenses for the year. Parents has 2 more children that are being claimed as dependents. I want to help them to get the full benefit of the tax law, but I also wants to be careful. How would you do it. I will be happy to read all advices I can get. I will be leaving to my main job in 15 minutes and come back in the evening (living in CA. Silicon Valey demands 2 jobs) Thank you in advance. Lucho Quote Link to comment Share on other sites More sharing options...
taxit Posted February 24, 2009 Report Share Posted February 24, 2009 Why do you feel they should not claim her? The tuition was most likely paid from loans. Quote Link to comment Share on other sites More sharing options...
David1980 Posted February 24, 2009 Report Share Posted February 24, 2009 Why do you feel they should not claim her? The tuition was most likely paid from loans. Quite possibly, but if the loans are in the name of the student they are considered self-support. If the loans are in the name of the parents, then the parents would have that considered as their support. It would be better if it was all paid by scholarships. Scholarships. A scholarship received by a child who is a full-time student is not taken into account in determining whether the child pro- vided more than half of his or her own support. Quote Link to comment Share on other sites More sharing options...
mcb39 Posted February 24, 2009 Report Share Posted February 24, 2009 Why do you feel they should not claim her? The tuition was most likely paid from loans. That would have been my answer. Also, nowhere does he state how much income the student had. In my experience it is not unusual for parents in that income bracket to be entitled to the tuition credits. Quote Link to comment Share on other sites More sharing options...
Lucho Posted February 25, 2009 Author Report Share Posted February 25, 2009 That would have been my answer. Also, nowhere does he state how much income the student had. In my experience it is not unusual for parents in that income bracket to be entitled to the tuition credits. First af all, thank for your comment. Second, the student's only income is the scholarship granted by the university; parents are not paying anything. Quote Link to comment Share on other sites More sharing options...
mcb39 Posted February 25, 2009 Report Share Posted February 25, 2009 First af all, thank for your comment. Second, the student's only income is the scholarship granted by the university; parents are not paying anything. Quickfinders Page 12-9...."Qualifying expenses paid by a student are considered to have been paid by the parent if the student is claimed as a dependent on the parents tax retunr (Reg l.25A-5(a) Also: If a parent claims a child as a dependent, only the parent may claim the education credit for the child. I have always thought that the tuition credits follow the exemption. Someone, correct me if I am wrong. Lucho: I would have no problem with giving the parents the dependency exemption and the tuition credit. Subtract the scholarship from the tuition and go forward. Obviously the child is not supporting itself. Eventually the loans will have to be repaid and then the child will get to deduct the student loan interest paid. Quote Link to comment Share on other sites More sharing options...
Lucho Posted February 25, 2009 Author Report Share Posted February 25, 2009 Quickfinders Page 12-9...."Qualifying expenses paid by a student are considered to have been paid by the parent if the student is claimed as a dependent on the parents tax retunr (Reg l.25A-5(a) Also: If a parent claims a child as a dependent, only the parent may claim the education credit for the child. I have always thought that the tuition credits follow the exemption. Someone, correct me if I am wrong. Lucho: I would have no problem with giving the parents the dependency exemption and the tuition credit. Subtract the scholarship from the tuition and go forward. Obviously the child is not supporting itself. Eventually the loans will have to be repaid and then the child will get to deduct the student loan interest paid. Thank you again Marilyn. Have a peaceful and profitable day. Lucho Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 25, 2009 Report Share Posted February 25, 2009 Most likely the student is getting a mix of scholarships, grants, and loans. And the parent is on the loans. You can not take the tuition that is paid with scholarships or grants, but can take the part paid with loans. Quote Link to comment Share on other sites More sharing options...
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