quaified education expenses

[morrisliberty]

hello,

I hope everyone is having a good tax season. I have a lot of students with receipts for books they want to include in american opportunity credit or lifetime learning credit if they qualify. I am having a problem understanding the differences between qualified education expenses and how they relate to course related books supplies and equipment for each credit. I quote from Instructions for form 8863 [2010]. Only certain expenses for course related books, supplies, and equipment qualify.American opportunity credit; Qualified education expenses include amounts spent on books, supplies,and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance.
Lifetime learning credit ;Qualified education expenses include only amounts for books, supplies, and equipment required to be paid to the institution as a condition of enrollment or attendance.
Books are qualifying education expenses for the american opportunity credit if needed for course of study but these same books are not qualifying education expenses for the lifetime learning credit unless you are required to purchase books from the school not the bookstore , which rarely happens except where the cost of books and supplies are included in the tuition. Could anyone verify or explain rules for books and qualifying education expenses for the credits if books are purchased from the school, college bookstore, a student , or other sources? thank you .

[ilea]

Books for the AOC can be purchased from any source, just have to be required for the course. For example, a text required for an English course could be included, but purchasing a dictionary because one is a poor speller could not.

LLC - for books to be included, they have to be required to be purchased from the college. For example, the junior college here uses a biology lab book that is written and published by faculty members. It is only available through the college - it HAS TO be purchased aat the school. Another example, a friend's son is at a college that part of the tuition convers text book rental. That would be a qualified expense, since they have to pay the cost to the school as a condition of enrollment.

[morrisliberty]

hello,

I was given a worksheet to determine qualified expenses for and Tuition and Fees Deduction {TFD}.

1. What is the total tuition paid to eligible institution may be found on Form 1098 -T box 1 or box 2?

2. What are the required fees, course-related books, supplies and equipment purchased from the educational institution?

3. What are the required fees, course-related books, supplies and equipment not purchased from the educational institution/

If you answer question 3 with 600 for books this amount is included in the calculation of qualified expenses for LLC and TFD which i believe is wrong and should only be used for AOC.

If you answer question 2 with 600 for books this amount is included in the calculation of qualified expenses for AOC which is correct but question 2 should be deleted because Form 1098_T box 1 is Payments received for qualified tuition and related expenses

Per your reply only qualified tuition and required fees,course-related books, supplies ,and equipment paid directly to eligible institution as a condition of enrollment or attendance is used to calculate qualified expenses for LLC ,AOC, And TFD. If the related expenses are paid to sources other than eligible institution then can only be used to Calculate the AOC. In other words the related expenses included on 1098- t are used to calculate the AOC, LLC, and TFD but the related expenses not on the 1098 _T
should only be included to calculate the qualified expenses for the AOC. Where I am going wrong?

[commentator]

1. Eligible tuition may or may not be an amount shown on Form 1098.
2. The statement means exactly what it says.
3. The statement is correct. You are wrong.

You are gong wrong by not believing what you read.

[mwcpa]

I concur.....with ilea and commentator
the various education credits have some difference in qualify expenses....and, as evidenced in this thread these difference can easily lead to confusion....don't you love our Congress who crafts these things....