- quote -

I wrote the initial inquiry. I am most appreciative, for the
most informative I info I have received.

My son graduated from college in May 2005, took a full time
job in mid June. He used money from the UGMA (his money) to
pay for the spring 2005 semester of college; paid in
January 2005.

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- quote -

Like he graduated in January?

Or he paid the tuition during calendar 2004?

Seth

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- quote -

You forget he also took his own money to pay for college.
You would need a BIZARRE set of circumstances for him to be
a dependent.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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I am well aware that any UGMA account funds are my son
assets. A bit of "dad boasting" -- my son used "our funds"
to graduate in 4 years. He has a great job in sales;
something his engineer dad could never do!

I am specifically following up -- to thank you and Phil
Marti for the advice provided -- THANKS

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- quote -

While this may be true, it doesn't hurt restating that the
support test got turned on its head for 2005. The son meets
all the requirements for a "qualifying child" based on the
OP except it's unclear about support. However the test now
is whether the child provided more than half his support for
the year. If he didn't, it no longer matters who did, and
he's still a qualifying child.

--
Phil Marti
Clarksburg, MD

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- quote -

If he earned $40K, had $30K after taxes, and put $25K into a
savings account (where it remained at the end of the year),
then wouldn't they only have to provide over $5K in support
to meet the test? (Or would that require $15K?)

Seth

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"don" <notwantingspam[at]hotmail.com> wrote:

- quote -

The lifetime learning credit applies here.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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don wrote:

- quote -

Interesting that you chose to use quote marks around "his
funds" - as if you really don't believe that to be the case.
Get used to it, it is HIS MONEY, and has been from the
instant it was deposited in that UGMA account. Just be glad
he used some of it for his education, rather than a new
sports car!

He earned
- quote -

From this I assume that he does not qualify to be your
dependent in 2005 (You probably don't meet the Support
Test).

- quote -

Educational deductions and credits are discussed in IRS Pub
970. You might want to review the qualifications and
limitations of each. None of them require that he itemize
his deductions. Since he has obviously completed his second
(sophomore) year of college, he does not qualify for the
Hope Credit. Whether the Educational Tuition and Fees
Deduction (above the line, reduces AGI) or the Lifetime
Learning Credit (reduces tax liability, nonrefundable) is
better can only be determined by calculating his tax return
both ways. Choose the one with the best tax result.

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"don" <notwantingspam[at]hotmail.com> wrote:

- quote -

See IRS Publication 970. His choices are the Lifetime
Learning Credit and the tuition and fees adjustment to
income. Make sure he includes the effect on state tax in
the overall calculation of which is better.

--
Phil Marti
Clarksburg, MD

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Our son (22 years old), graduated from college in June 2005.
Out of "his funds" -- albeit money that we gave him years
ago and maintained in a UGMA mutual fund account -- he paid
for the spring 2005 semester school costs. He earned
approximately $40 k in 2005, from the job he took upon
graduation.

I would like to advise him if he is eligible for any tuition
related "above the line" tax deductions? He will be taking
the standard deduction, as he clearly does not have
sufficient deductions to itemize. I am vaguely aware of the
Hope or Lifetime Learning Credit for instance -- I am unsure
if any of those would be applicable.

Most appreciative for any advice!!!

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