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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121596  
Subject: Re: HOPE and Lifetime Education Credit Date: 9/18/1998 8:24 PM
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[[I have a question concerning the HOPE and Lifetime Learning credits. I paid a portion of my
daughters college tuition for her second year in early 1998 (about $1000). Now I am paying for the
first portion ( about $1400) for her third year of college (again in 1998). After reading the posts on
the two credits, I'm not sure whether or not I can claim both credits in one year for the same
person.]]

Rusty....

The FIRST thing that you should probably do is to check with the school. I'm sure that they have a bunch of information on both of these credits that may provide additional examples and give you much more information.

'Cause I'm afraid that you might not like my answers.

The law is clear that you may NOT calim both credits for the same student in the same year.

For example, in Sept 1998 the Smiths pay $9,000 of qualifying tuition and expenses for their dependent daughter , who is an entering freshman at a private college. The Smith's modified AGI is under the required limit. They claim a $1,500 HOPE credit on their 1998 tax return based on $2,000 of qualifying expenses. The Smiths may not claim a Lifetime Learning Credit for the balance of their daughter's expenses.

In other words, for each year in which a student meets the eligiblity requirements for the HOPE credit, the student's expenses may be used as the basis for a HOPE credit OR a Lifetime Learning Credit, but NOT both.

This is pointed out in IRS Notice 97-60, Section 1, Q&A #17.

[[ Can I clain the HOPE credit for the $1000 I paid for her second year of school in 1998
AND the amount I paid for the third year in 1998 under the Lifetime Learning credit?]]

Sorry, but as noted above, the anser is no.

TMF Taxes
Roy

SPECIAL NOTE: Remember that this response is not the "last word" on your situation. It is really only a starting point. Make sure to review the "Read This First" post
(http://www.fool.com/School/Taxes/TaxesDisclaimer.htm) for additional information. In addition, many of your questions may already be referenced in the Taxes Frequently Asked Questions area. In order to visit the Taxes FAQ area, go to the Fool's Money area (http://www.fool.com/money.htm) and check out "Tax FAQs" in the list box, OR you can jump directly to the Taxes FAQ area (http://www.fool.com/school/taxes/taxes.htm). Additionally, if any references were made to the IRS Web Site, you can get there by pointing your web browser to (http://www.irs.ustreas.gov).
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