Erin attends graduate school to earn a master's degree in accounting. Her parents, the Martins, pay Erin's tuition for the program.
Early in 2014, Erin's dad left his job and took a few months off to relax and pursue his photography hobby. He started working at a new, higher-paying job in October. The resulting decrease in the Martins' annual income means that their modified AGI will be well below the phaseout threshold for the lifetime learning credit.
Thus, the Martins are considering prepaying Erin's 2015 spring semester tuition in December 2014, provided that the prepayment would get them a 2014 lifetime learning credit. In a memo to the tax research file, discuss whether the prepayment can be used to generate a lifetime learning credit for the Martins.