Hello Kathryn:
Thanks for your prompt reply. However, I am not including education expenses for 2018 in my 2019 return. Quite the opposite. I am including taxable income that would have been required to be paid in 2018 had I included the full scholarship amount in 2018. I was asking if I could include that as income in 2019.
I was guided by the following text provided by TT as a part of the following interview question :
"Did [[name here]]'s Aid Include Amounts Not Awarded for 2019 expenses? Schools sometimes will not report education expenses and the corresponding scholarship income on the same year's Form 1098-T. Learn more."
The explanatory text from "Learn More" above reads:
"Scholarship income must reduce qualified education expenses for each period of study that assistance is allocable to. However, sometimes scholarship income is not received at the same time education expenses were paid. This can cause your scholarship income to be overstated in one year and then understated in another year. If you received scholarships or grants in 2019 for expenses reported in a year other than the current year, enter an amount here to reduce your scholarship income amount. You will need to include that same amount as scholarship income in the tax year in which the education expenses are actually reported.
For example, in 2018 you received a 1098-T with $4,000 for your fall 2018 expenses which you reported on your 2018 tax return. In 2019 you received a 1098-T that included tuition expenses of $6,000 and $10,000 of scholarship income. $4,000 of the scholarship was actually for your 2018 expenses. You will enter $4,000 here to reduce your scholarship income to $6,000 for 2019. You may also need to recapture any education credit or deduction taken in 2018 that would have been disallowed in 2018 due to the additional $4,000 of scholarship income allocable to 2018 education expenses."
I was trying to follow the example above. If you look at my situation, I paid for the fall 2018 and spring 2019 expenses less full amount of scholarship in 2018. The school chose to break up the scholarship amount into one half in 2018 and another half in 2019. But the 2019 scholarship was fully used to pay for expenses incurred in 2018. Thus, I believe I am correct in choosing the option to say that the 15000 scholarship is not for expenses incurred in 2019. That's because there is NO expenses incurred in 2019 - it was all paid for in 2018!
In view of the above information, please can you look over my situation again and verify if I am following the example provided by TT correctly.
Thanks again.
