Lupe paid the following expenses during December 2016 for her son David's spring 2017 college expenses.The semester begins in February 2017. Tuition $ 16,000
Housing 6,000
Meal plan 2,500
In addition,David's grandfather paid $500 in fees on behalf of David directly to the college.David is claimed as a dependent on Lupe's tax return.How much of the above expenses qualify for purposes of Lupe's education credit deduction in 2016?

Question

Quizplus · Accepted Answer

The education credit deduction is available for qualified expenses paid during the tax year for the first four years of post-secondary education. The expenses must be for tuition, fees, and course-related expenses. In this case, the tuition, housing, and meal plan expenses are all qualified expenses. The fees paid by David's grandfather are also qualified expenses. Therefore, the total amount of qualified expenses is $16,000 + $6,000 + $2,500 + $500 = $24,500. However, the maximum amount of the education credit deduction is $2,500 per eligible student. Therefore, Lupe can only deduct $2,500 of the qualified expenses.

Lupe Paid the Following Expenses During December 2016 for Her