Taxpayers dependent is in 5th year of 4 year undergraduate program. No education credits were taken in first 3 years because income was too high. Jan-May 2009 was still 4th year, Sept-Dec is in 5th year. Would she be eligible for American Opportunity, or should I used Lifetime credit?
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Eligible
My position here is that either:
1) take American Opportunity Credit for Jan-May,
OR
2) take Lifetime Learning for entire year.
I did #1 for a client last week.
Bill -
See Pub 970
Example 2.
After taking classes at College V on a part-time basis for a few years, Shelly became a full-time student for the 2009 spring semester. College V classified Shelly as a second-semester senior (fourth year) for the 2009 spring semester and as a first-semester graduate student (fifth year) for the 2009 fall semester. Because College V did not classify Shelly as having completed the first 4 years of postsecondary education as of the beginning of 2009, Shelly is an eligible student for tax year 2009. Therefore, the qualified education expenses paid for the 2009 spring semester and the 2009 fall semester are taken into account in calculating any American opportunity credit for 2009.Comment
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The determination of the student's academic status is determined as of the last day of the year BEFORE the tax year.
MaribethComment
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The last sentence is what caught my attention - because the first semester qualifies, the cost of the fall semester Grad school is also eligible for the AOC.
Therefore, the qualified education expenses paid for the 2009 spring semester and the 2009 fall semester are taken into account in calculating any American opportunity credit for 2009.Comment
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My
take on it (not having read Pub 970) is that it wouldn't matter how many years you had taken classes, if you were still classified as an undergraduate and had not taken AOC four times yet, then go for it.Comment
Comment