We took out multiple Parent PLUS loans for our son, Jonny. He has now graduated and is making the payments on those loans and on federal direct loans he took for university education.
I received the Form 1098E in my name for large interest paid on the Parent PLUS portion of loans. But Jonny is making the payments. So, HE should get the credit. He is making much less than we are and he would benefit from the deduction. Isn't that the intent of the IRS law anyway? To provide a break to those who are payment student loan debt? Well, in this case, HE is making the payments, but the 1098-E is being issued to us, the parents, and we cannot benefit from it because we make too much money.
SO, being "legally obligated" can also mean a "loan agreement" between me and my son. I can draw up a loan/promissory note, where he agrees to make the Parent PLUS loan payments. That would make him "legally obligated". And then I'm deducting the interest from Form 1098-E on his tax return.
BTW, I already tried calling the loan servicer but they won't change it.
