One of the things I encourage my clients to do is pay for the 4 years of undergraduate tuition over 5 calendar years. The AOC/Hope is limited to 4 years. My interpretation of this was 4 academic years which would allow claimiing it 5 times. At an NCPE conference they said, "no you can only claim it 4 times" and then you would have to use Lifetime Learnign Credit or the Tuition Deduction once. Any opinions?
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The number of times you can claim it is only four tax years, just as Hope was only two tax years. With the Hope credit, one common tactic was to claim LLC for the first year (assuming starting school in Aug/Sep, so that it's just one semester), and then Hope for the next two. The other alternative is to pay for the spring semester in December, but that can be a problem if you're relying on student loans with no control over when they're sent to the school.
Part of the confusion relates to the qualifications. To qualify for the credit, the student must have at most four academic years of credit at the start of the tax year. This is rarely an issue, but could be with someone in a special five year program, or someone who got a post-secondary certificate and then enrolled in a four year degree program. -
Extension
Isn't this expanded AOC flushed down the toilet at end of the year if they don't extend it?Comment
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