Which of the following statements is not true regarding the education credits? A

Question

Which of the following statements is not true regarding the education credits? A) If a dependent pays for qualified expenses, the expenses are deemed paid by the taxpayer. B) Payments made using borrowed funds are not considered qualified expenses. C) If a relative makes payments for qualified expenses directly to the institution on behalf of the student, the expenses are deemed paid by the student. D) If a student receives a scholarship that is excluded from gross income, that amount should reduce qualified expenses.

Explanation / Answer

Ans. B       Payments made using borrowed funds are not considered qualified expenses. If a payment is made by using borrowed funds, it is also considered as a qualified expenses.

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