Can I claim deduction on my student loan even if it's under my parents name yet I pay for it each year?

Question

Last year my accountant let me deduct both my Sallie mae loans even though one is under my father's name.  I make all payments and my accountant said according to  Please see page 33 of IRS Publication 970 here: http://www.irs.gov/pub/irs-pdf/p970.pdf that I cannot.  I do not specifically see on here where it is not allowed?  Please advise.

Bostonian In MO · Answer

Look in the left column under the heading "Can You Claim the Deduction."  Now look at the 3rd bullet statement.  That's what tells you that you cannot deduct the interest on your father's loan.  Since he took out the loan, HE is legally obligated to pay, not you.  If you are paying it, NOBODY gets to deduct that interest.

Since you claimed it improperly last year, you must now amend your return to withdraw the interest on your father's loan and pay back whatever tax benefit that you received, plus penalties and interest for late payment.

shoredude2 · Answer

Page 33.  You are not legally required to repay the loan since it's not in your name.  So you can't deduct the interest.

tro · Answer

you would get a 1098 I of the student interest that you are obligated to pay, and only the one obligated to pay is able to claim the interest, regardless of who pays it

Slickterp · Answer

No, since you don't actually owe the money.  You must owe it AND pay it.

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Can I claim deduction on my student loan even if it's under my parents name yet I pay for it each year?

4 Answers