1. The Lifetime Learning Credit is different from the American Opportunity Credi

Question

1.       The Lifetime Learning Credit is different from the American Opportunity Credit. However, they do share some of the same requirements. Which of the following requirements is true for both education credits?

a.       There is no limit to the number of years the credits can be claimed

b.       Expenses related to noncredit courses are allowed as qualified education expenses

c.       The credit is available for only the first two years of postsecondary education

d.       To be eligible for either of the education credits, taxpayers must use any filing status other than Married Filing Separately

2.    Gail was 21 years old at the end of the tax year and a full-time student. Her earned income was less than one-half of her total support, but she will not be claimed as a dependent on anyone else’s return. Both of her parents are alive and she will not be filing a joint return. Gail qualifies for the American Opportunity Credit. Which of the following statements is true?

a.       Gail is eligible for both the nonrefundable and refundable portions of the American Opportunity Credit.

b.       Gail is eligible for only the nonrefundable portion of the American Opportunity Credit.

c.       Gail’s parents are eligible for the nonrefundable and refundable portions of the American Opportunity Credit.

d.       Gail’s parents are eligible for only the nonrefundable portion of the American Opportunity Credit.

Explanation / Answer

1. (b) Expenses related to noncredit courses are allowed as qualified education expenses

2. (a) Gail is eligible for both the nonrefundable and refundable portions of the American Opportunity Credit.

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