I have a client that is undergoing chemotherapy and is not allowed back on campus, so he must take his courses on line, and therefore was required to buy a computer. How do I handle the cost of the computer in calculating the American Opportunity Credit?
-
-
Assuming he is still enrolled as a student, you just add the cost to the eliible costs which qualify for the AOTC and proceed. -
Devil's advocate question
Just for the sake of discussion:
Is it not a likely assumption that somewhere around 99.9% of all college students already have a computer??
Otherwise, you would get a scenario where it would be wise for a high school graduate to wait until matriculation to buy a computer and then deduct it from their taxes.
Also, the term "course material" as mentioned in the AOTC would seem not/ to include a computer in the first place except under extraordinary circumstances.
I must be missing something........
FEComment
-
If it is a condition of enrollment or attendance.Comment
-
If you can justify it....
I still think it is a stretch, especially in the concept of "equipment"/"course material" re:Originally posted by solomon View Post
"Also, the cost of books and equipment are generally not qualified expenses because eligible educational institutions usually do not require that the cost of the books or equipment be paid to the institution as a condition of the student's enrollment or attendance at the institution; however, for taxable years 2009 and 2010, the American Opportunity Tax Credit modifies the Hope Credit to include course material whether or not paid to the education institution."
And, as I mentioned earlier, the phrase "required to BUY a computer" may not be entirely accurate either.
OTOH, my own college offspring currently has one course which requires taking part of the course online. There was an extra fee for that specific "service" - no brainer it's a qualified expense. But do you think I might now consider the cost of the computer, internet access, and the like (Netflix would not be considered) also as an additional tax savings??? I certainly could use the money.
FEComment
-
This comes from the IRS website FAQ.
Q5. Does an expenditure for a computer qualify for the American opprtunity tax credit?
A. Whether an expenditure for a computer qualifies for the credit depends on the facts. An expenditure for a computer would qualify for the credit if the computer is needed as a condition of enrollment or attendance at the educational institution.Comment
Comment