Education deductions...if parents paid.

[Bades]

So if parents paid for tuition, but can't claim the the Tuition and Fees (1040 line 34)(Form 8917) because they make too much, can I put that on my 1040?

I got my 1098-T form from my school, and it is in mine name, and shows no traceability to the account holder of who actually paid for it.

What is the legal stance here?

[Like2Plan]

So if parents paid for tuition, but can't claim the the Tuition and Fees (1040 line 34)(Form 8917) because they make too much, can I put that on my 1040?

I got my 1098-T form from my school, and it is in mine name, and shows no traceability to the account holder of who actually paid for it.

What is the legal stance here?

Are you still listed as a dependant on your parents taxes?

[Bades]

No I am not

[MonkeyMama]

You can't take deductions for bills that *you* didn't pay. That's the long and the short of it, when it comes to any tax deduction.

[Bades]

Turbo Tax Website:

Who is eligible to claim the Tuition and Fees deduction?There are a few requirements to qualify for the Tuition and Fees Deduction:

-You paid qualified education expenses of higher education.
-You paid education expenses for an eligible student.
-The eligible student is you, your spouse, or your dependent who you can claim as an exemption on your return.
-Your modified adjusted gross income is less than $80,000 ($160,000 if married filing joint).

You are not eligible to claim the Tuition and Fees Deduction if any of the following applies:
-Your filing status is married filing separately.
-Taxpayer is listed as a dependent in the exemption section of another person’s return.
-You or your spouse was a non-resident alien for any part of 2010

However I found this further down the page:

"You Paid All Qualified Expenses" and "Are not eligible to claim an exemption for your dependent" this means that, "Only your dependent can deduct the amount you paid. The amount you paid is treated as a gift to your dependent"

My dad paid for all qualified expenses, and he cannot claim me as a dependent, as I am 24 and living on my own.

So does this mean I qualify for the deduction?

[Bades]

So it appears I can take a deduction for something I didn't pay for?

[MonkeyMama]

Turbo Tax Website:

"You Paid All Qualified Expenses" and "Are not eligible to claim an exemption for your dependent" this means that, "Only your dependent can deduct the amount you paid. The amount you paid is treated as a gift to your dependent"

I think this is pretty questionable tax advice.

Per IRS: "You cannot take the tuition and fees deduction on your income tax return if you may be claimed as a dependent on someone else's return." Which is direct contradiction to Turbo Tax? Assuming the Turbo Tax quote is in the same context?

I stand by my first reply. I know you said you were not a dependent. But, if you were, the above would be wrong. & you aren't a dependent so all the above is irrelevant anyway.

OF course, it's pretty basic tax planning to gift someone money when they can utilize a deduction and their parents can't. But the thing is you still have to write the check. There is no law against anyone handing you a nice cash gift to cover it. So this would have been a solid plan with a little more forward thinking?

[Bades]

The turbo tax statement was speaking from the point of view, in my case, the parent, or the person who wrote the check in the first place.

You (as in person my dad) Paid All Qualified Expenses"
-Dad paid all qualified expenses

and "Are not eligible to claim an exemption for your dependent (me)"
- I'm 24 living on my own, Dad cannot claim me.

this means that, "Only your dependent (me) can deduct the amount you paid. The amount you(dad) paid is treated as a gift to your dependent (me)"
- I would then be eligible to take the deduction?

The IRS statement is saying the same thing. If I can be claimed as a dependent, I cannot take the deduction.
- Which I cannot be claimed as a dependent, therefore I can take the deduction?

I'm trying to find where I would've had to originally write the check. I'm assuming the "gifting" was in the form of the tuition.?

[Bades]

Straight from Publication 17:

Who Can Claim the Deduction:
Generally, you can claim the tuition and fees deduction if all three of the following requirements are met.

-You paid qualified education expenses of higher education. I did not pay
-You paid the education expenses for an eligible student. Nope
-The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption (defined in chapter 3) on your tax return. Yes, the eligible student was myself

The statement above would appear that I cannot not take the deduction because I did not pay the expense, HOWEVER, the statement proceeds itself with the magic word GENERALLY

If you read further down into the publication...

IF your dependent is an eligible student and you...

- are not eligible to claim an exemption for your dependent
- you paid all qualified education expenses
- only your dependent can deduct the amount you paid. The amount you paid is treated as a gift to your dependent.

So it seems like I should be able to, this publication though does not see to be 100% clear on the topic.

[MonkeyMama]

IF your dependent is an eligible student and you...

- are not eligible to claim an exemption for your dependent
- you paid all qualified education expenses
- only your dependent can deduct the amount you paid. The amount you paid is treated as a gift to your dependent.

You are not a dependent, so this whole point is moot.

I think this is referring to if you have a dependent, they are an eligible student, and for some reason you can not claim an exemption for your dependent. Off the top of my head I am not really sure what this applies to. But this explains that the Turbo Tax quote was in a completely different context than what I was trying to clarify. I am not getting the impression that this applies to your situation.

{I understand this is referring to your parents - the ones who would have the dependent. Just to be clear.}

[SnoopyCool]

IF your dependent is an eligible student and you...

- are not eligible to claim an exemption for your dependent
- you paid all qualified education expenses
- only your dependent can deduct the amount you paid. The amount you paid is treated as a gift to your dependent.

So it seems like I should be able to, this publication though does not see to be 100% clear on the topic.

You're not a dependent, at least not a qualifying child. Not sure if you pass as a qualifying relative to your parents (income and support tests).

I think if a noncustodial parent couldn't claim the exemption for the child, but paid the education expenses, that would be an example of the above, perhaps?

[jpg7n16]

You are not a dependent, so this whole point is moot.

Agreed. In the eyes of the IRS, you are just another guy who happens to have the same last name.

If my neighbor doesn't qualify for his education credit, can I take it? Nope. What if both of us have the same last name?? Nope.

If you were being claimed as a dependent, it would be different, but then you likely don't qualify as a dependent either.

IRS.gov - A "Qualifying Child"�

The statement above would appear that I cannot not take the deduction because I did not pay the expense, HOWEVER, the statement proceeds itself with the magic word GENERALLY

Yes. Generally speaking, the three criteria must be met. The exception being if you were claimed as a dependent (which you weren't).

Although it is possible for some taxpayers to deduct education expenses paid by their parents, the criteria they must first meet is to be claimed as a dependent.

You don't meet that criteria, so you do not qualify.


It's like saying, generally, you can contribute $5,000 to an IRA. (except if you're over 50, then it's $6,000)

"So I can contribute up to $6,000?" Are you over 50? "No." Then you can only do $5,000. "But it says generally that's true, maybe I can do $6k" Well, you could... if you meet the criteria of being over 50 (etc., etc.)

[Bades]

Ok I think I get it now.

Not sure what scenario I could be a dependent, and my father couldn't claim me as one?

So my situation proves that there are scenarios where no one can claim an Education deduction or credit even though a qualified expense was paid to a qualifying institution.

Thanks everyone for the help!