I have a client whose son is 25 and went to college in 2011. Son made $10K. Client paid for his son's education for the year but I don't think he can claim him as an exemption because of age. I assume then that he would not get any benefit from the tuition expense. Son didn't pay any tuition so he doesn't get deduction either. Am I correct?
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Dependent
Son would be able to take the tuition deduction,
See TTB 12-4(expenses paid by parents)Last edited by clr; 01-29-2012, 05:29 PM. -
Education Credit
No... wrong answer.
If the son is not a dependent, then the son can claim the education credit, even if it was paid by someone else.
See Pub. 17, page 236:
He may or may not benefit from the credit. If he can claim the refundable AOC, he's in good shape; if he only qualifies for the Lifetime Learning Credit, then it won't help him at that income level.Generally, qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Therefore, you are treated as having paid expenses that were paid from your dependent student's earnings, gifts, inheritances, savings, etc.
BMKLast edited by Koss; 01-29-2012, 05:29 PM.Burton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process.Comment
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Unanswered is the question of just how dear old dad paid the tuition.
If he paid it directly to the institution, then son didn't pay it.
However if dad gave the money to son who then paid it, then son gets the credit,
deduction, whatever fits.ChEAr$,
Harlan Lunsford, EA n LAComment
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Education Credit
Student gets to claim the education credit even if the tuition was paid by someone else. Doesn't matter whether it was money given to the student as a gift, or paid directly to the school.
See Pub. 17, as cited in my previous post.
BMKBurton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process.Comment
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Originally posted by ChEAr$ View Post
Pub 970 page 14 expressly allows dad's payments directly to the institution to be treated as paid by the son for purpose of the AOC (and on another page for the LLC.)Comment
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Reg. Sec. 1.25A-5(b)(1) attributes the payment by a third party to the student. Take a look at Example 1, in Reg. Sec. 1.25A-5(b)(3).
It doesn't matter who pays it...your neighbor, your grandmother, your boyfriend or your parent. It is treated as though it was paid by the student and the AOC can only be claimed on the return which claims the student as an exemption.Last edited by ttbtaxes; 02-11-2012, 07:25 PM.Comment
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It is foolish to give it to the student to take if the dad qualifies. 10K surely isn't enough to totally support yourself with unless you are paying small rent to parents and in that case if the kid is living with the parents and he can be qualified as a dependent the credit should go to dad.Originally posted by ttbtaxes View PostBelieve nothing you have not personally researched and verified.Comment
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I disagree with taxea
Even if son lived with Dad...Originally posted by taxea View Post
Age disqualifies the student from being a dependent as a qualifying child since he is not under the age of 24.
Income disqualifies the student from being a qualifying relative since his gross income of $10,000 exceeds the limit of $3700.
Dad cannot claim the student as a dependent, even if Dad supported him because the son failed to qualify as either a qualifying child or a qualifying relative.
Dad cannot take the education credit for his son since his son is not a dependent.
Of course, if the student is permanently and totally disabled, and earned his income for services performed at a sheltered workshop, this would change things.Comment
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