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Need help on this please: Deducting tuition and fees for college children.

Forum|Forum|7 years ago
June 4, 2019
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Our two children are college students and we claim them as dependents on our taxes. My father pays their college tuition (tuition only) from a family trust. The tuition check goes directly from the trust to the university. We pay their university fees. The university sends us a statement of tuition and fees paid for tax purposes. Are we allowed to deduct ALL the education expenses, or only the ones we actually paid for?

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Best answer by MichaelMc

You are allowed to claim the the American Opportunity Tax Credit or the Lifetime Learning Credit based on the full amount of qualified tuition and fees paid in the circumstances you have described.

The following position of the IRS is taken from IRS Pub. 970 Tax Benefits for Education:

"Generally, you can claim the American Opportunity Tax Credit if all three of the following requirements are met.

You pay qualified education expenses of higher education.

You pay the education expenses for an eligible student.

The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

Note. Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you." [Emphasis added.]

Identical guidance exists for the Lifetime Learning Credit.

M