Reba has a son, Chad (age 18), a freshman at Tulane University with tuition of $30,000 per year. Reba’s AGI is $45,000. She takes a withdrawal of $20,000 from her 529 Savings Plan and pays the remaining $10,000 in tuition out of her checking account.

Which of the following would you recommend?

a. ‘Take a Lifetime Learning Credit of $2,000.

Take a American Opportunity Tax Credit (AOTC) of $2,500.

c. Cannot take AOTC or Lifetime Learning Credit because she took a 529 distribution.

d. Take AOTC and Lifetime Learning Credit totaling $4,500 ($2,000 +

$2,500).