i know 8863 is not released yet, but i am still a bit confused. on form 1098-t, if box 9(checked if a gradute student) is checked, does that mean the person can not take the aoc credit? what if the student was an undergrad for half of the year and then started graduate school the second half? also, box five is scholarship and grants. alot of my clients in the past have told me that the amount in box five is a loan which they have to pay back. in that case, that would qualify them to take the credit. however, if it is a grant, and box 5 is larger than box 2, then they could not take the credit. i would appreciate your inputs on this.
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The amounts in box 5 should not include any loans. Just various scholarships, pell grants, state grants, etc.
You'll need to double check the rules (probably pub 970) as far as the other part of your question. -
Undergrad v Graduate
You are correct that if you are an undergraduate and a graduate student in the same calendar year you can count all tuition towards AOC. And, if there is no 1098 for the undergraduate period because it came out the prior year, I can see the problem. I think you have to do whatever you can to trick the software to allow the AOC and warn the client to keep the proof of everything because even though you are doing everything correctly there is a good chance this return will be subjected to a paper audit.Comment
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If you will read the instruction for F-8863, and read them carefully ... especially on page 2 ... all your questions should be answered. The rules are a bit confusing, because one of them refers to the "first four years of college," and another refers to taking the credit for a "maximum of four years" ... which includes any years the Hope Credit was claimed for the same student. If you still have Qs, Pub 970 may answer them.
Regarding the undergrad/post-grad status in the same year, it is the student's status as of the beginning of the year that counts. However, tuition for that part of the year may have been paid the previous year, so the amounts paid in 2012 may have been only for post-grad studies. To get this information you will need to inquire further of the student or his parents.
If the AOC is not available, the LLC probably is. It's a little less, but at least it's something.Roland Slugg
"I do what I can."Comment
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Loans should not be in this box. However, there have been so many errors on these forms in the past, there's no tellin' what some institutions put on there. Never rely on the 1098-T. Get a transcript from the college for a complete breakdown. Most students can get these online now.Originally posted by ardi600 View PostComment
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The rules on qualifying for AOC really haven't changed, same rules as before. Rely on Pub 970. Now it's just more "in your face". IRS is hoping making it more visible will cut back on people taking the wrong credit or taking a credit they don't qualify for.Comment
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