Appendix A (Continued)--Form 8863 Education Credits (Hope and Lifetime Learning Credits) 2005. Summary: This is an example of Form 8863 (2005) as pertains to the description in the text. The line items completed are:
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“Name(s) shown on return” field contains Dave and Valerie Jones
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“Your social security number” field contains 987-00-6543
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Under
“Part I: Hope Credit”:
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“1a. Student's name (as shown on page 1 of your tax return:”
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“First name” field contains Corey
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“Last name” field contains Jones
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“1b. Student's social security number (as shown on page 1 of your tax return)” field contains 137-00-9642
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“1c. Qualified expenses (see instructions). Do not enter more than $2,000 for each student.” field contains 2,000
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“1d. Enter the smaller of the amount in column (c) or $1,000” field contains 1,000
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“1e. Add column (c) and column (d)” field contains 3,000
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“1f. Enter one-half of the amount in column (e)” field contains 1,500
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“2. Tentative Hope credit. Add the amounts on line 1, column (f). If you are taking the lifetime learning credit for another
student, go to
Part II; otherwise, go to Part III” field contains 1,500
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Under
“Part II: Lifetime Learning Credit”:
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“3a. Student's name (as shown on page 1 of your tax return)”
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“First name” field contains Sean
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“Last name” field contains Jones
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“3b. Student's social security number (as shown on page 1 of your tax return)” field contains 246-00-9731
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“3c. Qualified expenses (see instructions)” field contains 4,800
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“4. Add the amounts on line 3, column (c), and enter the total” field contains 4,800
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“5. Enter the smaller of line 4or $10,000” field contains 4,800
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“6. Tentative lifetime learning credit. Multiply line 5by 20% (.20) and go to Part III” field contains
960
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Under
“Part III: Allowable Education Credits”:
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“7. Tentative education credits. Add lines 2 and 6” field contains 2,460
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“8. Enter: $107,000 if married filing jointly; $53,000 if single, head of household, or qualifying widow(er)” field contains
107,000
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“9. Enter the amount from Form 1040, line 38, or Form 1040A, line 22 (Footnote: See Publication 970 for the amount to enter
if you are filing
Form 2555, 2555-EZ, or 4563 or you are excluding income from Puerto Rico)” field contains 90,000
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“12. Subtract line 9 from line 8. If zero or less, stop; you cannot take any education credits” field contains 17,000
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“11. Enter: $20,000 if married filing jointly; $10,000 if single, head of household, or qualifying widow(er)” field contains
20,000
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“12. If line 10 is equal to or more than line 11, enter the amount from line 7 on line 13 and go to line 14. If line 10 is
less than line 11,
divide line 10 by line 11. Enter the result as a decimal (rounded to at least three places)” field contains .850
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“13. Multiply line 7 by line 12” field contains 2,091
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“14. Enter the amount from Form 1040, line 46, or Form 1040A, line 28” field contains 9,956
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“15. Enter the total, if any, of your credits from Form 1040, lines 47 through 49, or Form 1040A, lines 29 and 30” field contains
0
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“16. Subtract line 15 from line 14. If zero or less, stop; you cannot take any education credits” field contains 9,956
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“17. Education credits. Enter the smaller of line 13 or line 16 here and on Form 1040, line 50, or Form 1040A, line 31” field contains
2,091
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