AOC---Computer------what would you do?

[Super Mom]

I have a client who is VERY honest. She purchased a laptop for school in 2012 at Wal Mart. She can look back and find the transaction (I assume debit or charge or check??) but she can't find the specific receipt for the laptop although she knows how much it costed. She said to not worry about that amount since she can't find the actual receipt, but I'm thinking that's alot of $ to forgo if she has the transaction. Should I leave this alone, or tell her to count the laptop?

[smithtax]

How can she prove that it wasn't groceries or clothing she purchased?

IRS is receipt happy.

[Super Mom]

She can't prove that, although I'm sure she's telling the truth, wouldn't having the computer and it prob has a set up date in in it proof?

[AccTaxMan]

I have a client who is VERY honest. She purchased a laptop for school in 2012 at Wal Mart. She can look back and find the transaction (I assume debit or charge or check??) but she can't find the specific receipt for the laptop although she knows how much it costed. She said to not worry about that amount since she can't find the actual receipt, but I'm thinking that's alot of $ to forgo if she has the transaction. Should I leave this alone, or tell her to count the laptop?

Is this related to the education credits? From what I have read, laptop is not a qualified expense of education credits unless it is condition of course enrollment. I do not believe this happen very often. If a student bought a laptop for education purpose in general, it does not qualify. Please correct me if my interpretation is incorrect.

[Traveling EA]

Receipt vs CC or Debit card charge

There are many things that can be purchased at Walmart. An entry listed on a credit card statement or a bank statement is not sufficient proof for the IRS in case of an auditor that is looking for tax money. Even if you think she is very honest, the IRS thinks everyone is not. A receipt is necessary in case of an audit. She may be able to get one from the vendor. I do some work for a retail store and they can retreive duplicate receipts for the past 7 years. I am sure Walmarts POS system is a much better system than what my retail client has, so maybe the student can go to the Walmart to see if she can get a copy. This is all a mute point, if as AccTaxMan has commented on, the laptop is not able to be claimed as part of the credit.

[KBTS]

This is all a mute point, if as AccTaxMan has commented on, the laptop is not able to be claimed as part of the credit.

If the computer is required as a condition of enrollment or attendance, then it is a qualifying expense for the AOC. See the snippet from the IRS AOC Q&A page....

Q7. Does an expenditure for a computer qualify for the American opportunity 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.

[thomtax]

Is this related to the education credits? From what I have read, laptop is not a qualified expense of education credits unless it is condition of course enrollment. I do not believe this happen very often. If a student bought a laptop for education purpose in general, it does not qualify. Please correct me if my interpretation is incorrect.

A computer being required for a course is not an unusual situation. In fact, I have been reading that many colleges now require, as a condition of enrollment that the student have a computer. I don't remember the actual school names, but some of them now are even charging for, and providing, a computer if the student does not have one. Just a sign of the times, I guess.

LT

[Burke]

Virginia Tech is one of those, for example. And as for the receipt, if she charged it on a credit card, the CC company can provide her with a copy of the paper she signed. Since most receipts are electronic these days, it would describe the item.

[Roberts]

I don't know of a private high school that doesn't include a laptop in their tuition.
I can't imagine a University at this point that didn't require a laptop or tablet. Whether it's a requirement to log onto class boards to upload or download assignments, check for reading assignments or to know test scheduling, a laptop is all but required.

Pretty much all the dorms and classrooms have wifi.

My nephew said most of his courses distributed EVERYTHING electronically. His first semester he purchased physical books - he exchanged them all for electronic and everything has been electronic since. He reads everything on a tablet where he can highlight electronically, does all of his assignments on a laptop. His tablet will even keep track of how much time he has spent on material so he knows how much time each class took when the semester is over.

[ddoshan]

AS I understand it ... it would be more unusual than not for a computer to be a qualifying cost for the education credit. As I understand it, a computer would not be a qualified expense unless it is part of the required course materials such as a particular book requirement for a course. For example, for a particular computer course you may, as a condition of enrollment in the course, be required as part of the tuition and fees for the course to have a laptop computer, then fine. But if a computer is not listed as a requirement for a particular course, which in most cases they are not, then no. Just being recommened or helpful is not enough.

[mactoolsix]

And the list is growing:

This list was started several years ago to provide a quick overview of institutions with some sort of notebook or laptop computer initiative.

http://www2.westminster-mo.edu/wc_users/homepages/staff/brownr/NotebookList.html

Last update Jan 2013

Mike

[ddoshan]

I would add .. We mulled over this computer thing many times. A year or two ago we got a course listing and or synopsis from a local college showing all the various courses offered. Each course listed the required course materials such as what books, lab supplies, or whatever were required for each course.
There were only a few courses which listed as a requirement for the course that the student must have a laptop computer. That one might be helpful or recommended is not enough as far as I understand. It must be a requirement as a condition of enrollment in a particular course.

If a college recommended or encouraged that each student have a laptop, I would not think that would suffice. If the college indicated that a laptop was required as a condition of enrollment then allright. But does that happen very often.
I rather doubt it.

[FEDUKE404]

Computer is a stretch

I would add .. We mulled over this computer thing many times. A year or two ago we got a course listing and or synopsis from a local college showing all the various courses offered. Each course listed the required course materials such as what books, lab supplies, or whatever were required for each course.
There were only a few courses which listed as a requirement for the course that the student must have a laptop computer. That one might be helpful or recommended is not enough as far as I understand. It must be a requirement as a condition of enrollment in a particular course.

If a college recommended or encouraged that each student have a laptop, I would not think that would suffice. If the college indicated that a laptop was required as a condition of enrollment then allright. But does that happen very often.
I rather doubt it.

I pretty much concur. While you may "need" a computer for an online course or whatever, does that also mean that is a "requirement" for the course and thus you can call the computer an educational expense?

"I rather doubt it."

While there are certain reasonable exceptions (for instance purchase of course-required software or even a souped up computer to handle an engineering course) that might tilt the tables, in today's world I think it is a stretch to deem a computer a required college expenditure within the confines of education credits et al. There are many "required" expenses (room/board come to mind) for many students, but that fact does not make those expenses rise to the level of qualifying for education credits. There are likewise numerous "required" fees that show up on a student's bill, but some are "qualifying" and...some are NOT. (Bow our heads toward Form 1098-T !) Many/most schools now "require" a student to have health insurance....does that fact make said health insurance eligible for an education credit??

FE

[mactoolsix]

I'm not questioning the wisdom of the Senior Members here . .

I pretty much concur. While you may "need" a computer for an online course or whatever, does that also mean that is a "requirement" for the course and thus you can call the computer an educational expense?

So, if a student is taking an online course, you feel a computer may not be a requirement? How can he take the course without it?

Many/most schools now "require" a student to have health insurance....does that fact make said health insurance eligible for an education credit??

FE

Health insurance fees are disallowed by statute.
(C) Exception for nonacademic fees Such term does not include student activity fees, athletic fees, insurance expenses, or other expenses unrelated to an individual’s academic course of instruction.

http://www.law.cornell.edu/uscode/text/26/25A

Thanks,
Mike

[S T]

Interesting about the computer - so I googled - maybe each of us need to google our clients college to determine

Example: Univ of Fla - had a statement

Computer Requirement
College and Degree Program Requirements/Recommendations
Access to and ongoing use of a computer will be required for all students to complete their degree programs. The university expects each student entering the university and continuing students to acquire computer hardware and software appropriate to the degree program. Competency in the basic use of a computer is a requirement for graduation. Class assignments may require use of a computer, and academic advising and registration can be completed by computer. In addition, official university correspondence is sent via e-mail.

Example: Univ of Phoenix also requires a computer

and the list goes on

A student at the local community college not meeting half-time requirements - only taking a few courses - I would say no to the Laptop or Computer cost - but enrolled as full-time - something to consider depending on the classes and what the College requirements are.

Sandy