If the student pays for tuition/books etc with a student loan, does that affect the available education credit? I'm probably over thinking the situation... The amounts are paid, but with a deferred loan. The loan is accruing interest and t/p is liable for debt so my thoughts are no it doesn't matter if it is cash/credit or loan.
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Nope ... borrowed funds same as cash.Originally posted by taxgirlRoland Slugg
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Can parents take tuition deduction if paid with student loans?
Taking this question a step further...
If the student is being claimed by her parents, can the parents take the tuition and fees deduction even though the tuition was paid with loan proceeds? If loan proceeds are considered cash and dependent education expenses are considered paid by the parents, then the parents can claim education credits or deductions based on tuition paid with student loans, correct?
Just making sure I understand this correctly... thanks!Comment
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TTB 12-1 and 12-3.Comment
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Yes, they can assuming they are claiming as a dependent. Loans have to be paid back, so they qualify as payments.Comment
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