Can our daughter claim herself and pay less or can we split the scholarships between our tax return and hers to reduce taxes or qualify for college deductions?

[kc4braves1]

My daughter graduated this year and we will be claiming her one last time. We have already used the AOTC 4 times so I know we cannot claim it again.  Is there a way to claim the Life Long Learning credit by moving scholarships to taxable income kind of like we did for the AOTC or...not? I just want to make sure we are getting the most we can this last year. Thanks. Appreciate your knowledge, Hal_Al .

[Hal_Al]

Q. Is there a way to claim the Life Long Learning credit by moving scholarships to taxable income kind of like we did for the AOTC?

A.  Yes.  You do it exactly the same.

But, it takes $10,000 of qualified expenses to get  the maximum ($2000) Lifetime Learning Credit (LLC) instead of the mere $4000 for the AOTC.   The LLC has no refundable portion. So, assuming you have at least a $2000 tax liability the LLC is worth 20%.  Compare that to your student's tax rate on the $10,000 of income.  You'll probably still come out ahead.

[kc4braves1]

Thanks. She still doesn't have her tax paperwork from the college. I may have more questions when we have it in hand.  I guess we'll have to try it both ways and see which we come out better with overall.  Thank you.