Tax Return Question

[Unoriginal Name]

If a person took out a loan for education, in which they are the party legally obligated to payback the loan, for a dependent of theirs they are allowed to use the student loan interest for a deduction. What happens when this dependent is no longer a dependent? Can they still deduct student loan interest even if the person the loan was taken out for is no longer a dependent of theirs?

[Stu]

Re: Tax Return Question

If a person took out a loan for education, in which they are the party legally obligated to payback the loan, for a dependent of theirs they are allowed to use the student loan interest for a deduction. What happens when this dependent is no longer a dependent? Can they still deduct student loan interest even if the person the loan was taken out for is no longer a dependent of theirs?

I believe you can only make that deduction if you're the one paying the interest. If you're paying interest for somebody who isn't a dependent, I'm not sure.

[Unoriginal Name]

Re: Tax Return Question

I believe you can only make that deduction if you're the one paying the interest. If you're paying interest for somebody who isn't a dependent, I'm not sure.

They would still be the ones paying the interest. The only thing that has changed is that the person the loan was used for is no longer a dependent.

For instance, parents take out a loan for their childs education. The parents are the ones legally obligated to pay the loan back. They claim the deduction since the child is a dependent. Later on the child is no longer a dependent but the parents are still paying the loan. Eventhough the child is no longer a dependent can the parents still deduct the interest they pay on that student loan?

[Stu]

Re: Tax Return Question

They would still be the ones paying the interest. The only thing that has changed is that the person the loan was used for is no longer a dependent.

For instance, parents take out a loan for their childs education. The parents are the ones legally obligated to pay the loan back. They claim the deduction since the child is a dependent. Later on the child is no longer a dependent but the parents are still paying the loan. Eventhough the child is no longer a dependent can the parents still deduct the interest they pay on that student loan?

I believe the answer is, yes they can deduct it because a) they are paying the loan and b) the student was a dependent when the loan was taken out. You should probably double check that though.

[Unoriginal Name]

Re: Tax Return Question

I did some looking around on the IRS website and it looks like as long as the loan was taken out when the person was a dependent that they can deduct the interest on it for the duration of the loan.

[MassNole]

Re: Tax Return Question

I did some looking around on the IRS website and it looks like as long as the loan was taken out when the person was a dependent that they can deduct the interest on it for the duration of the loan.

I would definitely seek the advice of a tax professional before making that jump to be safe.

[Altimus]

Re: Tax Return Question

I would definitely seek the advice of a tax professional before making that jump to be safe.

I agree. Just give them a call and ask.