From IRS Publication 970, Tax Benefits for Education, Qualified Higher Education Expenses:
Expenses for room and board must be incurred by students who are enrolled at least half-time.The expense for room and board qualifies only to the extent that it isn't more than the greater of the following two amounts.
- The allowance for room and board, as determined by the school, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.
- The actual amount charged if the student is residing in housing owned or operated by the school.
But you listed your distribution as $5k. The entire distribution can be used towards the tuition amount. For the room and board figure, you would need to check with the school to see what their housing cost is.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Thank you for your reply.
Actually, my daughter received grant in the amount of $8,288. So, we paid only $870 for tuition and room and board in the amount of $10,290. Total our expense is $11,160. Among $11,160, we received coverdell ira distribution in the amount of $5,000. To calculate american opportunity credit, can we apply entire room and board expense as education expense? Is there any limits? Please advice! Thank you.