nudgor
Level 1
12-07-2019
12:23 AM
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Best Answer Click here
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Level 11
12-07-2019
12:23 AM
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The easy answer is "$15,000 of taxable scholarships and fellowships" in Screen 14.1 of the child's return. Kid is subject to both kiddie tax and AMT.
TaxGuyBill
Level 15
12-07-2019
12:23 AM
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The not-so-easy answer depends on this: Would the parents qualify for the American Opportunity Credit if there was tuition paid? If so, do the scholarships/grants allow that money to be spent on non-tuition expenses (most do, including Pell grants)?
*IF* both of the above are "yes", then you probably want to enter $17,000-$19,000 (an extra $2000-$4000) on the child's return, and $2000-$4000 of tuition on the parents' return.
*IF* both of the above are "yes", then you probably want to enter $17,000-$19,000 (an extra $2000-$4000) on the child's return, and $2000-$4000 of tuition on the parents' return.
Level 11
12-07-2019
12:23 AM
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Agreed. You can also dig around for non-tuition components of QEE to reduce the amount taxable to the kid.