[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.25A-0]

[Page 77-78]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.25A-0  Table of contents.

    This section lists captions contained in Secs. 1.25A-1, 1.25A-2, 
1.25A-3, 1.25A-4, and 1.25A-5.
Sec. 1.25A-1  Calculation of education tax credit and general 
          eligibility requirements
    (a) Amount of education tax credit.
    (b) Coordination of Hope Scholarship Credit and Lifetime Learning 
Credit.
    (1) In general.
    (2) Hope Scholarship Credit.
    (3) Lifetime Learning Credit.
    (4) Examples.
    (c) Limitation based on modified adjusted gross income.
    (1) In general.
    (2) Modified adjusted gross income defined.
    (3) Inflation adjustment.
    (d) Election.
    (e) Identification requirement.
    (f) Claiming the credit in the case of a dependent.
    (1) In general.
    (2) Examples.
    (g) Married taxpayers.
    (h) Nonresident alien taxpayers and dependents.
Sec. 1.25A-2  Definitions
    (a) Claimed dependent.
    (b) Eligible educational institution.
    (1) In general.
    (2) Rules on Federal financial aid programs.
    (c) Academic period.
    (d) Qualified tuition and related expenses.
    (1) In general.
    (2) Required fees.
    (i) In general.
    (ii) Books, supplies, and equipment.
    (iii) Nonacademic fees.
    (3) Personal expenses.
    (4) Treatment of a comprehensive or bundled fee.
    (5) Hobby courses.
    (6) Examples.
Sec. 1.25A-3  Hope Scholarship Credit
    (a) Amount of the credit.
    (1) In general.
    (2) Maximum credit.
    (b) Per student credit.
    (1) In general.
    (2) Example.
    (c) Credit allowed for only two taxable years.
    (d) Eligible student.
    (1) Eligible student defined.
    (i) Degree requirement.
    (ii) Work load requirement.
    (iii) Year of study requirement.
    (iv) No felony drug conviction.
    (2) Examples.
    (e) Academic period for prepayments.
    (1) In general.
    (2) Example.
    (f) Effective date.
Sec. 1.25A-4  Lifetime Learning Credit
    (a) Amount of the credit.
    (1) Taxable years beginning before January 1, 2003.
    (2) Taxable years beginning after December 31, 2002.
    (3) Coordination with the Hope Scholarship Credit.
    (4) Examples.
    (b) Credit allowed for unlimited number of taxable years.
    (c) Both degree and nondegree courses are eligible for the credit.
    (1) In general.
    (2) Examples.
    (d) Effective date.

[[Page 78]]

Sec. 1.25A-5  Special Rules Relating to Characterization and Timing of 
          Payments
    (a) Educational expenses paid by claimed dependent.
    (b) Educational expenses paid by a third party.
    (1) In general.
    (2) Special rule for tuition reduction included in gross income of 
employee.
    (3) Examples.
    (c) Adjustment to qualified tuition and related expenses for certain 
excludable educational assistance.
    (1) In general.
    (2) No adjustment for excludable educational assistance attributable 
to expenses paid in a prior year.
    (3) Scholarships and fellowship grants.
    (4) Examples.
    (d) No double benefit.
    (e) Timing rules.
    (1) In general.
    (2) Prepayment rule.
    (i) In general.
    (ii) Example.
    (3) Expenses paid with loan proceeds.
    (4) Expenses paid through third party installment payment plans.
    (i) In general.
    (ii) Example.
    (f) Refund of qualified tuition and related expenses.
    (1) Payment and refund of qualified tuition and related expenses in 
the same taxable year.
    (2) Payment of qualified tuition and related expenses in one taxable 
year and refund in subsequent taxable year before return filed for prior 
taxable year.
    (3) Payment of qualified tuition and related expenses in one taxable 
year and refund in subsequent taxable year.
    (i) In general.
    (ii) Recapture amount.
    (4) Refund of loan proceeds treated as refund of qualified tuition 
and related expenses.
    (5) Excludable educational assistance received in a subsequent 
taxable year treated as a refund.
    (6) Examples.

[T.D. 9034, 67 FR 78691, Dec. 26, 2002]