Goal

Tax Memo

TO: File
FROM: Javaid Hassan
RE: John Wilson (tax year 2010)

Facts
John Wilson lives in Cape Cod and disengages classes of his graduate computer programme in Boston. He pays for study, books, supplies and travel expenses for the program. He spends over $10,000 per year. His tax status is marital filing jointly.

Issue and Conclusion
Is John Wilson entitled to get a credit or deduct the cost of his graduate program?

Analysis
John Wilson can take Lifetime Learning recognise or Tuition and Fees Deduction moreover if he cannot take both.
John Wilson is eligible for Lifetime Learning Credit but the deduction amount may be limited. According to internecine Revenue Code (abbreviated as IRC in below) piece 25A(c)(1), the taxpayer is eligible for the credit that is equal to 20 percent of so a lot of the qualified tuition and related expenses paid by the taxpayer during the nonexempt year as does not exceed $10,000. Qualified tuition and related expenses is explained in IRC divide 25A(f)(1) as tuition and fees necessitate for the readjustment or attendance at an eligible educational institution and has to be paid to that institution.



Based on IRC Section 222(d)(3), a deduction is allowed for qualified tuition and related expenses only to the extent such expenses ar in connection with enrollment at an institution of higher education during the taxable year. Thus, Mr. Wilson is eligible for the portion of credit that is equal to 20 percent of so much of the tuition. If the books and supplies are required for enrollment, those can be counted as an extra portion of credit. If they are not required to be obtained from the institution, Mr. Wilson is not allowed to use that amount for the credit. Based on Section 25A(f)(1)(C), expenses unrelated to an individuals academic course are excluded from the calculation of the credit. In this case, travel expenses are nonacademic fee and dont count for Lifetime Learning Credit.
Mr. Wilson can or else choose to...If you want to get a full essay, order it on our website: Orderessay



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