waste of education credits?

[tacks]

Father supporting 29 yo son who goes to grad school in another state. Father can not take the education credits. Correct?

This stinks.

(i'm tempted to deduct major consulting fees from dad's business and put it on the kid who's starting out. but that would smell soooo bad. to me anyway.)


great forum, btw,

thanks

[KBTS]

Does the son qualify as a dependent using the Qualifying Relative rules? He is too old to be a dependent under the Qualifying Child rules. See TTB pg 3-15 for chart. If he qualifies as a dependent, father could be able to claim education tax benefits for him.

[tacks]

Hey KB,

My head is 'well spent' at the moment.

But i thought he'd need to live with Dad to qualify as as 'dependent relative.'

I'll check it in the morning.

In all sincerity i appreciate the response and reply.

thanks

tacks

[snowshine]

he only needs to live with dad for HH status, not dependency.

[BOB W]

he only needs to live with dad for HH status, not dependency.

He is over 23 and has 3600 ish of income.... no good for dependent. If yes, he could file his own return with education credit and get $1,000 refundable ed cr.

[FEDUKE404]

Age ?

I thought there was an age issue, especially for the refundable education credits??

(Brain fatigue is also settling in here....)

Definitely agree that only way dad could get benefits is if son can be claimed as a dependent, and of course the son does not claim himself either.

FE

[Jesse]

Off the top of my head and subject to error:

Under age 24 the support issue comes into play earned income must be more than 1/2 of support.

But the student is in Grad school so no American Opp Credit - Lifetime learning or tuition deduction and no refundable credit.

[S T]

Confusion

Confusion as usual over these dependency rules, I just can't seem to get them straight - but trying and taking each one as it comes. I just need to "cut and paste" the TTB reference material on Chapter 3 to my desktop, as I am referring to it often, and I usually don't have EITC and child care credit issues with my "long term clients", but all of these situations are arising out of nowhere.

I am thinking and I apologize in advance if I am wrong

The son would not qualify as a QC as he is over age 24 - even if he is a full time student, even though the son might meet all of the other QC tests

QR test, son is a relative, hopefully not a qualifying child of any other taxpayer, gross income must be under the $ 3,650,(info not posted) and the Taxpayer (Dad) would have to provide over half of the Son's support.

Wouldn't all of those factors ( we are missing Son's Income for 2009) qualify the Dad to claim as a dependent.and Dad could claim the Lifetime Learning Credit?

Sandy

[BOB W]

Under age 24 the support issue comes into play earned income must be more than 1/2 of support.

But the student is in Grad school so no American Opp Credit - Lifetime learning or tuition deduction and no refundable credit.

Yes over 23...No refundable credit.......sorry.

Can't go on without Son's income for 2009.

[taxea]

1. does the son intend to move back into the dad's home when he is done with school?
2. did he go from dad's home directly into school, possible temporary residence
3. who supports him while in school? Surely he is not paying all of the support with 3600.
4. does he have any scholarships or grants that cover housing food etc?

If the answer to the first 2 is yes and the answer to 3/4 is the dad and/or scholarship/grants I could make a case for him being a qualifying relative and dad should pay the tuition directly to the school to be able to prove the expense.

[tacks]

Wow!

Thanks to everyone who posted on this!

Son took a distribution from an IRA -- 10,200. I intended to deem that as a penalty free withdrawal for 'qualified higher education.'

Son started a business -- loss of approximately 1,000.

[tacks]

earned income

cool. ira is not earned income.

But the student is in Grad school so no American Opp Credit - Lifetime learning or tuition deduction and no refundable credit.

darn it!!!

[KBTS]

Thanks to everyone who posted on this!

Son took a distribution from an IRA -- 10,200. I intended to deem that as a penalty free withdrawal for 'qualified higher education.'

Son started a business -- loss of approximately 1,000.

IRA distributions are included in gross income, so the son will not meet that test and cannot be claimed as a dependent. Perhaps the son will be able to claim the education credit instead.

[tacks]

IRA distributions are included in gross income, so the son will not meet that test and cannot be claimed as a dependent.

Darn it!

Perhaps the son will be able to claim the education credit instead.

Yes, he most certainly can. But his income is very very small. What good will it do him?

[tacks]

KB,

As much as i hate to wast these credits i do appreciate your feedback. My frustration is not directed at you personally. Far from it.

again, great forum.