The cap of 2500 deduction is per student? or is it per return. I have a situation were son and parents are both responsible for the debt. At the time of debt incurrence son was a full time student and dependent on dad and mom return. During the year son paid 2600 in interest and dad paid 300. son is NOT a dependent on mom and dads return this year. This is probably a mute question.
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From Pub 970
Pub says if you meet these five items you can deduct it:
Can You Claim the Deduction?
1. Generally, you can claim the deduction if all of the following requirements are met.
2. Your filing status is any filing status except married filing separately.
3. No one else is claiming an exemption for you on his or her tax return.
4. You are legally obligated to pay interest on a qualified student loan.
5. You paid interest on a qualified student loan.
And from the tax code: https://www.law.cornell.edu/uscode/text/26/221
(a) Allowance of deduction
In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan.
(b) Maximum deduction
(1) In general
Except as provided in paragraph (2), the deduction allowed by subsection (a) for the taxable year shall not exceed $2,500.
So, your questions begs if Dad can deduct the $300 and the son deducts the allowed $2,500??? total $2,800 deducted
I think it is safe to limit the total taken between the two to $2,500.
But will be interested in other opinions. -
Dad asked the question and I was not 100% sure he could or could not. We maxed out the sons deduction.Comment
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To answer your original question, it is per return.
It is not entirely clear which "year" you are talking about. You said son is not a dependent of Dad's "this year." 2015 or 2016? If son is filing own 2015 return and claiming himself, and he paid $2,600, it appears son can deduct $2,500. It also appears Dad can deduct $300 on his own return.Comment
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Is dad legally responsible for the debt? Does son need to be his dependent for him to take it? Did dad pay it directly or give money to son to pay it? Can dad prove he made the payment?Originally posted by Burke View PostBelieve nothing you have not personally researched and verified.Comment
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Dad did pay direct to creditor. Son was a dependent at time debt was incurred. Son is not a dep for 2015. Finished school in 2014 and went to work. Dad and son are both listed on loan documents.Comment
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What does TTB say.Believe nothing you have not personally researched and verified.Comment
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