smithff33[at]aol.com wrote:
- quote -

1. Child is your dependent.
2. Child is owner of the bonds.
3. Interest belongs to the child.
4. Child spent the funds on qualified higher education expenses.
4. Child was probably under age 24 when the bonds were purchased
and therefore they are not qualified savings bonds. No exclusion.
5. You may claim a higher education tax benefit (Hope or Lifetime
Learning) for the qualified higher education expenses expended on
your dependent (doesn't matter that he made the payment) assuming
your income is not too high.
6. No one is allowed a tuition & fees deduction when a dependent
spends his own money on education.
6. You are allowed to forgo claiming an exemption for your
dependent. If you do that, no one gets the exemption but your
child can claim an education credit on his own tax return.

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On Apr 13, 2:20�pm, msche...[at]yahoo.com (michael schey) wrote:
- quote -

Savings Bond interest is only tax-free (when used for education) if
the bonds were purchased after 1989 AND are owned by the parent or
parents. Bonds purchased for a minor and put in their name (as owner
or co-owner) are NOT eligible for this tax benefit. The interest is
fully taxable to the student, but may be used to claim an educational
deduction or credit.

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On Mon, 13 Apr 2009 14:55:09 EDT, Bill Brown <brownwp[at]longwood.eduwrote:

- quote -

Everybody gives a different answer on this one, including the IRS. I
spoke with two different people in the same department and they gave
me two different answers.

Define owner of the bonds. Is the owner the person whose name they
were in? If so, that is my son. The bond amounts were used to pay
for his tuition. Therefore, he should not have to pay a tax on the
interest. Why is turbotax saying he owes money on this?

I have received advice from people and the IRS that this should be
included on my return, with a note on his stating that I have done so
and the reason why (for tuition expenses).

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On Apr 13, 11:46*am, msche...[at]yahoo.com (michael schey) wrote:
- quote -


The interest income goes on the return of the person who owned the
bonds.

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Can't seem to find a straight answer to this one. Been on hold with
the IRS for a bit. Afraid I am not going to get a straight answer
from them either.

19 year old dependent has $2000 in W2 Earnings
$5000 in interest earnings from cashing in some EE bonds. Money used
to help pay tuition costs.

When I put the interest income on his return it says the interest
income is not deductible, and I thought EE bonds used for college
expenses were. We received a 1098-T from his school for the qualified
tuition expenses.

The question I have is whether or not the interest income should be
reported on our return or his. If I put it on his it says he is not
eligible for the credit. I have not tried to put it on ours yet.

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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. > << ------------------------------------------------------- >