If you have a foreign or American exchange student living with you, you
might be able to deduct some of the qualifying expenses if the student:
1.
Lives in your home under a written agreement between you and a qualified organization as
part of a program of the organization to provide educational opportunities for
the student,
2.
Is not your relative or dependent, and
3.
Is a full-time student in the twelfth or any
lower grade at a school in the United States.
You can deduct up to $50 a month for each full calendar month the
student lives with you as a charitable deduction to the qualified organization.
Any month when conditions (1) through (3) above are met for 15 or more days
counts as a full month.
Qualified organization. For these purposes, a qualified organization can
be any of these organizations:
·
A community chest, corporation, trust, fund, or
foundation organized or created in or under the laws of the United States, any
state, the District of Columbia, or any possession of the United States
(including Puerto Rico). It must, however, be organized and operated only for
charitable, religious, scientific, literary, or educational purposes, or for
the prevention of cruelty to children or animals.
·
Certain organizations that foster national or
international amateur sports competition also qualify.
·
War veterans' organizations, including posts,
auxiliaries, trusts, or foundations, organized in the United States or any of
its possessions (including Puerto Rico).
·
Domestic fraternal societies, orders, and
associations operating under the lodge system. (Your contribution to this type
of organization is deductible only if it is to be used solely for charitable,
religious, scientific, literary, or educational purposes, or for the prevention
of cruelty to children or animals.)
·
For example, if you are providing a home for a
student as part of a state or local government program, you cannot deduct your
expenses as charitable contributions.
·
Foreign students brought to this country under
a qualified international education exchange program and placed in American
homes for a temporary period generally are not U.S. residents and cannot be
claimed as dependents.
Qualifying expenses. You may be able to deduct the cost of books,
tuition, food, clothing, transportation, medical and dental care,
entertainment, and other amounts you actually spend for the well-being of the
student.
Expenses that do not qualify. You cannot deduct depreciation on your
home, the fair market value of lodging, and similar items not considered
amounts actually spent by you. Nor can you deduct general household expenses,
such as taxes, insurance, and repairs.
Reimbursed expenses. In most cases, you cannot claim a charitable contribution
deduction if you are compensated or reimbursed for any part of the costs of
having a student live with you. However, you may be able to claim a charitable
contribution deduction for the unreimbursed portion of your expenses if you are
reimbursed only for an extraordinary or one-time item, such as a hospital bill
or vacation trip, you paid in advance at the request of the student's parents
or the sponsoring organization.
Mutual exchange program. You cannot deduct the costs of a foreign
student living in your home under a mutual exchange program through which your
child will live with a family in a foreign country.
Reporting expenses for student living with you. If you claim amounts
paid for a student who lives with you, as described earlier under you must
submit with your return:
·
A copy of your agreement with the organization
sponsoring the student placed in your household,
·
A summary of the various items you paid to
maintain the student, and
·
A statement that gives:
a. The
date the student became a member of your household,
b. The
dates of his or her full-time attendance at school, and
c. The
name and location of the school.
We can help you determine which reduction credits you qualify for, and
will also recommend the credits that give you the best tax outcome.
If you would like any additional information please feel free to contact
me.
Amare
Berhie, Senior Tax Accountant
(651)
300-4777, (612)424-1540, (651) 621-5777
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