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[[Between my wife and I we have 2 small cd's each worth the same amount.
There is enough to pay off my daughters first college loan. I have heard that it is
okay to use this money for education without any penalties.]]

If they are just certificate of deposits (and NOT in your IRA account) there should be neither taxes or penalties. But if the CDs are in your IRA, then you may avoid penalties, but certainly not taxes. You can read more about this issue in my post in the Tax FAQ area.

[[ I have not sent in my
taxes yet. I was going to take the Hope credit for the year 1998. If I can take
the money to pay the first year loan, can I still take the Hope credit? If I wait till
after April 15 would it make any difference? And if I do this either way can I still
take the credit next year??]]

Sorry...but I'm not sure that I can understand your questions. You might head on over to the Taxes FAQ area and read my various posts about the Hope and Lifetime credits and how they all interact.

TMF Taxes
Roy

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