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Financial Planning / Tax Strategies


Subject:  Re: Lifetime Learning Credit Date:  2/1/2001  4:08 PM
Author:  TMFExRO Number:  45329 of 133112

But, the employeer reimbursement will be included as ordinary income. it does not affect the LLC. does that make sense?

I'm a little uneasy just saying yes, but I think so. Let me put it this way.

The credit is based on "qualified expenses." You cannot count expenses to the extent that you received tax-free reimbursement. So, let's say you had $3,000 of qualified expenses and received a $1,000 tax-free reimbursement. You'd have $2,000 of expenses you could use in calculating the credit. If, however, your reimbursement was taxable income, the entire $3,000 of expenses would count.

Phil Marti
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