Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Student Loan Interest

Level 1

Student Loan is in parents name.  Student no longer lives at home and is paying the loan.  How can I get the interest transferred from the parents name to the students tax return?  Can I put it on the parents return as a negative and put the students name in information to transfer to their tax return or is there no way to fix this problem?  Should I figure the tax return with the loan interest for the student to get a refund then figure it without the interest and suggest they get the difference from the parent?

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
Level 1

Yes the question was answered by two people.  I have looked at both and are waiting to meet with the tax payers to discuss that they would like to do for their children.  Thank you for your help.

View solution in original post

0 Cheers
3 Replies 3
Level 11

Is it a Parents Plus Loan?  Only the parent borrower is required to pay back a Parent PLUS Loan, as only the parent signed the master promissory note for the Parent PLUS Loan. The student is not responsible for repaying a Parent PLUS Loan. They're under no legal obligation to do so.

Since the student is not liable for the interest, he can't deduct.  Since the parents aren't paying it, neither can they.  (Of course, the student might say that they payments are a gift to the parents, and let IRS figure out substance over form.)

Level 8
Level 8

Your last statement < Should I figure the tax return with the loan interest for the student to get a refund then figure it without the interest and suggest they get the difference from the parent?> is the best way to handle it.

Level 1

Yes the question was answered by two people.  I have looked at both and are waiting to meet with the tax payers to discuss that they would like to do for their children.  Thank you for your help.

View solution in original post

0 Cheers