@BelknapPoint speaking of AOTC, can you clarify something: folks trying to capture AOTC but also receiving scholarships that exceed tuition are often told to make sure to pay $4k for tuition, not R&B, and treat the scholarship as covering R&B (in cases where scholarship does not specify it is for tuition). Does ‘assignment’ of scholarship dollars this way for purposes of AOTC effectively define a larger share of the scholarship as taxable income, or are these independent? For example: assume a $65k scholarship at a college where tuition is 55k and R&B 15k. With no parent AOTC involved, if I understand this correctly, the student would have 10k of taxable scholarship income, which would be under 12k, so no tax due. Now, if parents claim on their tax return that they paid 4K toward tuition, that would imply that 14k of the scholarship went toward R&B, creating tax due on the 2k over 12k. Is that correct or are the two actions not linked that way?
Sorry to be a bit off topic but this thread will be useful for many and this is a topic I haven’t seen discussed in this context.