Education Credit, double check

[geekgirldany]

Taxpayer has been taking the hope credit the past two years for daughter. This is the daughter's third year in college. Taxpayer makes to much to take education credits. I was reading the information on the Tuition Deduction.

To my understanding with the Education Credits it does not matter who pays the tuition as long as the student is a dependent. With the Tuition Deduction if the tuition is paid by a third party then the student has to deduct it. The tuition is being paid with student/dependent Mutual Fund account. So I believe this be deductible on the dependent's tax return not the Taxpayer/parents. Is that correct?

If that is correct... then is it not deductible when student/dependent is being claimed by taxpayer? The reason I asked is because when I do the son's tax return I have him marked as being claimed by his parents. When I put in the Tuition Deduction it will not allow the adjustment. But when I remove the "being claimed by another person" it allows the tuition deduction.

I hope that made sense. My brain is just not working too good today. Would appreciate any help

[Koss]

No deduction

I am surprised, but it looks like you've got the right conclusion.

See the chart on page 133 of Publication 17.

IF

your dependent is an eligible student

and you claim an exemption for your dependent

AND

your dependent paid all qualified education expenses

THEN

no one is allowed to take a deduction.

[geekgirldany]

Thanks so much Burton for posting that. I am surprised myself.