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i just got 1098-T from school, box 2. $3,046(amounts billed for qualified tuition and related expenses), and box 5. $4,520(scholarships or grants) but the other boxes are empty.
I think none of amount can not claim for deduction because i used scholarship/grants for expenses, expenses less than scholarship/grants.. and I don't have any expenses record which paid by myself at this time. please give me advise. thank you.

2007-02-23 13:23:20 · 2 answers · asked by DK 1 in Business & Finance Taxes United States

2 answers

No you will not be able to claim the deduction due to the scholarship being more than the tuition expense

Update
Publication 970 States in 5th bullet
No Double Benefit Allowed
You cannot do any of the following.

Deduct qualified education expenses you deduct under any other provision of the law, for example, as a business expense.

Deduct qualified education expenses for a student on your income tax return if you or anyone else claims a Hope or lifetime learning credit for that same student in the same year.

Deduct qualified education expenses that have been used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or a qualified tuition program (QTP). For a QTP, this applies only to the amount of tax-free earnings that were distributed, not to the recovery of contributions to the program. See Figuring the Taxable Portion of a Distribution in chapter 7 (Coverdell ESA) and in chapter 8 (QTP).

Deduct qualified education expenses that have been paid with tax-free interest on U.S. savings bonds (Form 8815). See Figuring the Tax-Free Amount in chapter 10.

**Deduct qualified education expenses that have been paid with tax-free scholarship, grant, or employer- provided educational assistance. See the following section on Adjustments to Qualified Education Expenses.

Adjustments to Qualified Education Expenses
If you pay qualified education expenses with certain tax-free funds, you cannot claim a deduction for those amounts. You must reduce the qualified education expenses by the amount of any tax-free educational assistance and refund(s) you received.

Tax-free educational assistance. This includes:
The tax-free part of scholarships and fellowships (see chapter 1),

http://www.irs.gov/publications/p970/ch06.html#d0e6715

2007-02-23 13:38:58 · answer #1 · answered by Anonymous · 1 2

The first answerer has failed to consider the full relationship between grants and tuition expenses. The link below will take you to Publication 970. You will see that the expenses you can spend grants on are much broader than just tuition. Consequently, it is possible to get a full grant and still get some relief for tuition expenses. Just make sure you understand all the conditions. Quite a few of the fees ordinarily charged by colleges (eg, sports facilities not related to a degree program) do not count either for a grant or for the tuition credits/deduction.

Having said all that, as you do not have any record of your expenditure, you are scuppered anyway.

EDIT: I am not suggesting double-dipping. I am suggesting allocating the grant money to OTHER qualified expenses, such as books (provided the terms of the grant permits that) thus reducing the amount that must be set against tuition otherwise eligible for Hope, LLC or deduction. This is a simple piece of tax planning.

2007-02-23 22:12:53 · answer #2 · answered by skip 6 · 0 2

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