recapture of education credits when sell books

Suppose you used books to increase the value of your education credit, such as the AOC. The following year you sell your books back, or you sell them on eBay. Do you then have to pay back some of your tax credit? It seems like you have to because

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Credit recapture. If any tax-free educational assistance for the qualified education expenses paid in 2012, or any refund of your qualified education expenses paid in 2012, is received after you file your 2012 income tax return, you must recapture (repay) any excess credit. You do this by refiguring the amount of your adjusted qualified education expenses for 2012 by reducing the expenses by the amount of the refund or tax-free educational assistance. You then refigure your education credit(s) for 2012 and figure the amount by which your 2012 tax liability would have increased if you claimed the refigured credit(s). Include that amount as an additional tax for the year the refund or tax-free assistance was received.

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Is that true for books? On what line of 1040 does one report the additional taxes -- on line 60 (Other taxes), and what is the code?

Reply to
remove ps
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Yes it is true. The 1040 instructions for Line 44 (Tax) tell you how to recapture the credit. You just add the amount to all other taxes on Line

  1. For some reason unknown to me, the IRS elected to recapture the credit directly on Line 44 rather than with other credit recaptures on Line 60.
1040 Line 44 Instructions

Recapture of an education credit. You may owe this tax if you claimed an education credit in an earlier year, and either tax-free educational assistance or a refund of qualified expenses was received in 2012 for the student. See Form 8863 for more details. Enter the amount and ?ECR? in the space next to line 44.

Reply to
Alan

Line 44, "ECR".

Reply to
Mark Bole

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