<p>My 20 year old son received a 1098-T from his school for 2008. Qualifying tuition and fees was about $15,000. Scolarship and grants was about $5000. The remaining $10,000 was paid by loans, $5000 from me and $5000 from him. I am claiming him as a dependent. He earned about $4000 in 2008 but I paid for most of his living expenses. QUESTION: Am I able to claim the money I borrowed for his tuition as a deduction? Does he have to live with me to be a dependent? Any other suggestions/advice appreciated. Thanks-</p>
<p>You can't claim the money you borrowed as a deduction. You may be able to claim interest paid. You may also be able to claim certain credits, such as the Hope tax credit if he is in the 1st two years, for tuition and fees paid or use certain education expenses as a deduction. IRS 970 lists the various education tax benefits and the rules regarding income limitations and who can claim what.</p>
<p><a href="http://www.irs.gov/pub/irs-pdf/p970.pdf%5B/url%5D">http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>Just curious, why can't the loan amounts be used as a tuition deduction from income? They paid the tuition and will repay the loan.</p>
<p>You can deduct the tuition paid with the loans or get the appropriate tax credit for tuition paid with the loans (if income limits etc are met). You can't deduct the loans themselves.</p>
<p>I believe that you can claim up to $4,000 for tuition and fees deduction subject to income phaseouts. Put the information into your tax software and see whether it takes the Hope Credit, Lifetime Learner credit or tuition deduction.</p>
<p>I believe the amount you can deduct varies depending on income. If you make $116,000 or more, you don't qualify for any deduction.</p>
<p>Thanks for all who helped.</p>