Can i take both the Amer Opp Credit and Ibond interest in same year if i have about $3000 in college tuition for my daughter? I will be in income phase out range.

[Hal_Al · Accepted solution]

Q. Can i take both the Amer Opp Credit (AOC) and Ibond interest exclusion in same year if i have about $3000 in college tuition for my daughter?

A. No. It would be  double dipping to count the same $3000 of qualified expenses for two tax breaks. 

But, there is a loop hole available.  Use the $3000 tuition to claim  the AOC.

Roll over the cashed savings bond to a 529 plan. This must be done within 60 days of cashing the bond.  Later,  take a 529 distribution (withdrawal) to reimburse yourself for other educational expenses, including room & board (if student is half time or more). 

Reference: https://www.savingforcollege.com/article/how-to-rollover-us-savings-bonds-into-a-529-plan#:~:text=In....

Instead, you could split the $3000; $2000 to AOC and $1000 to the bond.  The AOC is 100% of the first $2000 of expenses (tuition) and 25% on the 2nd $2000. Only the bond interest (Not the whole bond amount) is excludable, so you have to do the math to see which way is best.  Usually the first $4000 of expenses should be used for the AOC.