On Apr 25, 8:35�pm, "Rick" <R...[at]nospam.com> wrote:
- quote -

You can do one or the other, but not both. The tax effect (reduction
of taxable income) is the same for either option. Your choice.

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This question is about tax year 2007. I incurred $1800 in tuition expense
for my children, and I am eligible to record this expense on line 34 of my
1040 as an adjustment to my income. I am not eligible to claim the tuition
tax credits on line 49.

I also cashed in an EE savings bond in 2007 and earned approximately $3000
in interest. Under the terms of the bond, I am allowed to exclude from the
$3000 any portion used to pay qualified educational expenses. The $1800 in
tuition expense I incurred would qualify for this exclusion.

So my question is this. Should I record the $1800 in tuition expense on
line 34 of my 1040 as an income adjustment and report the full amount of the
interest earned on the bond ($3000) on my schedule B and include it in my
total interest income on line 8a? Or would it be better to apply the
tuition expense against the $3000 in interest income and reduce my interest
expense on the bond to $1200, and not fill out line 34. Or can I do both?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >