Lifetime Learning Credit for room/board paid with taxable scholarship money

Paying for College
1

<p>Can I claim on my taxes (my son is a dependent) the Lifetime Learning Credit for the room and board expense, if my son went to school in a Midwestern Disaster County and my son also had taxable scholarship money in excess the room and board amount? The disaster counties expands qualifying expenses to room and board for those eligible, but it seems too good to be true, since the room and board was paid with scholarship money.</p>

2

<p>I think you can. The rules say you can’t claim the credit for any qualified education expenses paid with tax free scholarships. As these scholarships were taxable to your so, because they were used for room and board, it looks like you can claim the credit for the expense. I will have to have another look when I am more awake though.</p>

3

<p>I am confused (in general) about the various tax breaks. Is it better to use scholarships to pay for the room and board, or the tuition? Or is that question too simplistic to even answer?</p>

4

<p>see the discussion here: </p>

<p><a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/706793-hope-lifetime-credit-changes-09-10-a.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/706793-hope-lifetime-credit-changes-09-10-a.html&lt;/a&gt;&lt;/p&gt;

5

<p>So, to get the Lifetime Learning Credit in the midwestern disaster area, I would</p>

<ol>
<li><p>do son’s 1040ez, which will have about $6,000 in taxable scholarship income; and not claim any deductions for books or anything else; just pay the taxes;</p></li>
<li><p>claim cost of room and board, and books on my taxes, using the Form 8863. </p></li>
</ol>

<p>Also, my daughter qualifies for the Hope credit from a midwestern disaster county, so I would claim the Hope Credit for her and the Lifetime Learning Credit for my son-- both of them on my return.</p>