Student Loan Interest

[fasteddie577]

My sister cosigned for her daughter's college loan when she first started school. My sister has been paying the loan until last year. In 2018 the daughter graduated from school and started working and helped her mother pay half the loan payments for year 2018. Who has the right to claim the student loan interest on their 2018 tax return? 

[Ashby · Accepted solution]

The answer is that either one of them can claim the interest because they are both obligated to pay the loan.

A parent who cosigned student loans may claim the student loan interest deduction. To claim the student loan interest deduction, the borrower must be legally obligated to make the payments on the student loans and the Student must be a dependent of the Cosigner. Cosigning the loans counts as legally obligated to make the payments.

[fasteddie577]

Thank you TurboTax Ashby. 🙂