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Level 7
February 5, 2025
Solved

21-yr old student received 70K IRA inheritance from Gma

  • February 5, 2025
  • 2 replies
  • 11 views

Can she claim herself if she took entire IRA in 2024 rather than be parents' dependent? She was self-supporting, but not on earned income. Can she claim the American College credit for tuition paid?

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Best answer by TaxGuyBill

If she paid for over half of her own support, her parents are not allowed to claim her as a dependent.

Because she did not pay for over half of her own support with EARNED income, she might not be eligible for the refundable portion of the American Opportunity Credit.  But go through all of those rules to check if there other things that would allow her the refundable portion.

2 replies

qbteachmt
Level 15
February 5, 2025
Don't yell at us; we're volunteers
GretaAuthor
Level 7
February 5, 2025

It's advantageous for the daughter to claim herself in 2024 since she is using the 70K IRA inheritance to cover her tuition and living expenses. I assume that's permissible? The American education credit may not be permissible.

Level 15
February 5, 2025

If she paid for over half of her own support, her parents are not allowed to claim her as a dependent.

Because she did not pay for over half of her own support with EARNED income, she might not be eligible for the refundable portion of the American Opportunity Credit.  But go through all of those rules to check if there other things that would allow her the refundable portion.