@Hal_Al - that statement says you MAY; it doesn't say you CAN. And it never mentions AOTC in the statement specifically.
do note that on the RIGHT side of page 14 of publication 970 it states under the AOTC section:
you can't "Claim a credit based on qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer." isn't that exactly what you suggest?
Can you please point to the specific reference in publication 970 that lays out how you MAY do it. I've already provided the documentation from the same publication where the IRS says you CAN'T.
However, under the lifetime learning section, beginning on page 22, it does state on page 28 that there is coordination available with Pell grants and other scholarships to increase the lifetime learning credit, but it references lifetime learning credit and there is no mention of AOTC.
Is it possible your "loophole" is not a loophole at all but simply permissible under the lifetime learning credit, and simply not permitted under AOTC?
