Dana is 44 unmarried and earned 40000 in wages Danas 22yearo

Dana is 44, unmarried, and earned $40,000 in wages. Dana\'s 22-year-old son, Tom, rents an apartment near campus during the school year and spends summers at home with his mother. Tom is a full-time student who is in his 3rd year of college working towards his degree in chemical engineering. Tom does not have a felony drug conviction. Dana paid $4,000 of Tom\'s tuition that was not covered by his scholarship. Dana provided more than half of her son\'s support and all the cost of keeping up her son\'s apartment. Tom\'s only income was $3,800 in wages. Dana and Tom are U.S. citizens and have valid Social Security numbers. 3. Who can claim the American opportunity credit?

Solution

American opportunity credit also known as hope scholarship credit is provided to support cost of higher education qualification for the payment by taxpayer self , his dependent benefit and third parties on behalf of taxpayer’s dependent. If a student is claimed as dependent then only taxpayer is allowed to claim the AOC credit even if real expenses are paid by student self. So for that case Only Dana can claim the American opportunity credit.