is done with school 2 years ago. He is making all the payments on a student loan. He gets the student loan interest-it is in his Mother's name and social secuirty #. Only the individual who is legally required to make interest payments under the loan terms may claim the deduction, son is not on the loan. Mom is below the phase out and would benefit from the deduction. Son is on his own for the last two years(2005 evidently very little was paid and no one took the deduction). $ amount for 2006 is around $3300. Mom says it was a "parent" loan. Can she take the deduction, without making the payments????? Or is it lost??
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Since mom didn't make the payments she can not take the deduction.
For 2007 son could gift money to mom so she can make the payments. Since he is not on loan he never can get the deduction. -
You are
forgetting who benefited from the loan - surely not the mother. In addition, the son is no longer the dependent of the mother.Comment
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deduct the interest
>>who benefited from the loan - surely not the mother<<
If it was not in the mother's best interest to sign for the loan, why would she do so? It's her loan, and while it is nice that the student is helping to repay it, unless they restructure their payments to comply with the tax code nobody gets to deduct the interest.Comment
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Not sure if this applies. but under Can You Claim the Deduction Pub. 970 and 17
Interest paid by others
If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest.Comment
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Kiplinger
had an example that they called "new" method where if the parents paid for son's education loan the son could take the deduction. Someone gave me a copy, but it did not give a reference just highlighted that you could do it now. Did not say anything about the reverse working.???Comment
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Still
looking for a magic. I will keep looking...Comment
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Jon, According to this reference- mom would get the deductionInterest paid by others
If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest.Last edited by Gene V; 02-13-2007, 05:01 PM.Comment
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Thank
you very much Gene.Comment
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