NOL from Tuition Deduction?

Question

An adult supporting herself from savings while attending graduate school full-time has negative AGI because the $4000 tuition and fees deduction exceeds her small amount of income. Is this a NOL? Total income from W-2 wages, interest, dividends, and a long-term capital gain is $2357. Subtracting the $4000 tuition and fees deduction produces AGI of -$1643. Subtracting the $4850 standard deduction produces -$6493 on

1040 line 40. Form 1045 Schedule A, if I am filling it out correctly, allows the -$6493 as a NOL. I cannot find any documentation that specifically discusses whether or not the tuition and fees deduction can produce a NOL. Bob Sandler

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D. Stussy · Accepted Answer

No.  No business activity.  Also, I don't see why theeducation would be deductible at all, based on what isgiven.

David Woods, EA, ChFC, CLU · Answer

Try the tuition and fees deduction....--David M. Woods, EA, ChFC, CLUWoods Financial ServicesNorwood, MA 02062

D. Stussy · Answer

That doesn't lead to an NOL.  The 2002-2005 deduction on the front of the 1040is a non-business amount.

David Woods, EA, ChFC, CLU · Answer

Which means what? The comment of yours about education being deductible not being deductible AT ALL was wrong. Taxpayer attends graduate school. Taxpayer deducts tuition fees. Any effect or lack thereof on an NOL is besides the point.

-- David M. Woods, EA, ChFC, CLU Woods Financial Services Norwood, MA 02062

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NOL from Tuition Deduction?

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