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respondent’s determination disallowing petitioner’s claimed
charitable contribution deductions is sustained.
2. Education Credit
An individual taxpayer may claim the Hope Scholarship Credit
for payments made to an eligible educational institution for
qualified tuition and related expenses of an eligible student
during the first two years of that student's post secondary
education. Sec. 25A(b)(2)(C). For taxable years beginning in
2002, 100 percent of qualified tuition and related expenses not
in excess of $1,000 and 50 percent of the next $1,000 of such
expenses are taken into account in determining the amount of the
Hope Scholarship Credit under section 25A(b)(1) and (4). Rev.
Proc. 2001-59, sec. 3.04, 2001-2 C.B. 623, 625. For tax years
beginning in 2002, a taxpayer's modified adjusted gross income in
excess of $41,000 is taken into account in determining the
reduction under section 25A(d)(2)(A)(ii) in the amount of the
Hope Scholarship Credit otherwise allowable under section 25A(a).
Id. Thus, in 2002, the allowable amount of the credit is reduced
for taxpayers who have a modified adjusted gross income over
$41,000 and is completely phased out when the modified adjusted
gross income reaches $51,000. See sec. 25A(d)(2).
The notice of deficiency indicates that, absent a phaseout
reduction, petitioner established sufficient education expenses
to qualify for the maximum $1,500 Hope Scholarship Credit. As
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Last modified: May 25, 2011