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Section 25A(g) states special rules which apply to both the
Hope Scholarship Credit and the Lifetime Learning Credit.
Specifically, section 25A(g)(4) provides:
(4) Treatment of certain prepayments.-- If qualified tuition
and related expenses are paid by the taxpayer during a
taxable year for an academic period which begins during the
first 3 months following such taxable year, such academic
period shall be treated for purposes of this section as
beginning during such taxable year.
In the present case, during taxable year 2001 petitioners
prepaid qualified tuition of $3,611 for the 2002 spring semester,
an academic period which begins during the first 3 months
following taxable year 2001. Therefore, pursuant to the plain
language of section 25A(g)(4) the prepayment amount of $3,611
would properly be included in the calculation of petitioners’
Lifetime Learning Credit for the 2001 taxable year and not their
2002 taxable year. Accordingly, respondent’s determination on
this issue is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011