In the current year, Aaron was a full-time student. Aaron's father paid an amount equivalent to Aaron's tuition of $17,000 directly to Aaron who, then, remitted the funds to the school. Which is correct concerning the deductibility of the tuition paid by Aaron in the current year? Assume that the tuition paid is qualifying tuition expense.

A. Aaron cannot deduct the monies paid to the educational institution because Aaron received those monies as a gift from his father.
B. Aaron can take this tuition payment as an itemized deduction
C. Since Aaron would not be taxed on the gift from his father, Aaron can deduct the $17,000 paid to the educational institution as an adjustment to Gross Income to arive at Adjusted Gross Income
D. Aaron's father can take the deduction from Gross Income to arrive at Adjusted Gross Income.

HELP!! Wiley says "C" is the correct answer but Aaron got monies as a gift from his Father! I guess Aaron could prove that the tuition was paid via other monies that did not come directly from his father???

My best guess:

Answer A: The source of the tuition is irrelevant in this problem because it is implied that Aaron is not a dependent of his father. What matters is that the tuition is a qualifying one.

Answer B: Tuition can be deducted as an itemized deduction only if it is work related.

Answer D: I don't know why the father doesn't take the deduction. Maybe Aaron is not a dependent or that by claiming this deduction, Aaron will benefit more than the father.

Finally, Answer C: He will be claiming it on Form 8917 which flows to line 34 in page one of the form 1040.

This answer to this question is more about which situation is the most plausible. It fails to mention Aaron's age, whether or not he is a dependent, whether he has significant income (to determine who should best claim this deduction), and why they're not using form 8863 for education credit.

I hope this helps.

FUTURECPA12345 wrote: Isn't 4k the limit deduction to arrive at agi?

yes, you can deduct up to $4K for AGI on line 34 form 1040 if you meet the criteria