George Alexander pays $9,300 in tuition and fees in December 2019, and his child began college in January 2020. He filed his 2019 tax return on February 14, 2020 and claimed a Lifetime Learning Credit of $1,860. He claimed no other tax credits. After he filed his return, his child withdrew from two courses and George received a refund of $2,900. He must refigure his 2019 Lifetime Learning Credit using $6,400 of qualified education expenses instead of $9,300. After George refigures the credit, he determines his tax liability increased by what amount

After George refigures the credit, he determines his tax liability increased by

$580.

Explanation:

a) Data and Calculations:

Tuition and fees paid by George Alexander in December 2019 = $9,300

Claimed Lifetime Learning Credit = $1,860

Credit = 20% of Tuition and fee ($1,860/$9,300 * 100)

Refund received from two courses that child withdrew from = $2,900

Refiguring his 2019 Lifetime Learning Credit using $6,400 ($9,300 - $2,900) instead of $9,300, the tax liability will increase by:

= $2,900 * 20% or ($1,860 - ($1,860/$9,300 * $6,400)) = $580

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