@Hal_Al
Q. Am I calculating this correctly? Can I claim that full room and board cost and qualify for the credit?
A. Yes. That is allowed. You may be able to slightly reduce to amount she is taxed on. See example below.
Q. How may I be able to slightly reduce the amount she is taxed on by using that example?
I have seen this tax loop hole example posted on multiple community questions- I understand what it's saying but I do not understand how to enter it how you're explaining it.
I have entered her 1098-T as shown on form, I can then enter related expenses for her books & supplies etc., and then under the place where it asks how much of this scholarship was used to pay for room & board, is where I enter the amount that I have put on my return, correct? The full room and board charged by the college is the $5895, and I can claim this even if the scholarships paid for some of it? I get the full $2500 credit if I enter this whole amount. If I enter any less, I get less of a credit. I have tried different numbers up to this amount to see the difference, because then she would owe less taxes. I'm assuming that the IRS will cross reference our returns to see if we are claiming the same amount to be taxable, so I want to make sure the figures I'm using are accurate.
Thanks for your help!
