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Here at work I have friend that has/had a Student loan. They Defualted on it and there Tax returns have been taken to pay those off. The Loans are 6 years old this year. They were paid off with this years return.

Our question is, Can she file amended returns for the first 5 years ( 60 months ) of the loan, and claim the intrest? ( Even with the default status ).

If you're asking whether she can claim the interest in the years in which it should have been paid, no, she can't.

If you're asking whether she can consider the snatched refunds as payments in the years snatched, sure she can. If those payments satisfy the requirements and her AGI allows, I don't see why she couldn't deduct the interest paid. See Publication 970 for the rules.

If she has an allowable deduction for a timely filed 1998-2000 return that she didn't deduct, she can amend on Form 1040X. The deadline for 1998 is 4/15/2002.

Phil Marti
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