Planning for Education Costs: Gift & Income Tax Strategies


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question 1 of 3

Which of the following is true of the American Opportunity Credit?

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1. What is the penalty for using 529 plan earnings for expenses other than qualified higher education costs?

2. Who pays the gift tax when a gift is given that triggers a tax bill?

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About This Quiz & Worksheet

The quiz and worksheet will test your understanding of tax strategies for education costs. Information that would be helpful to know would be information about the American Opportunity Credit and the penalty of using 529 plans for different costs.

Quiz & Worksheet Goals

Use these assessments to test your knowledge of:

  • Individual who pays gift tax
  • Information about 529 plans
  • Penalty for using a 529 plan to pay for things other than college costs
  • Information about a gift that exceeds the annual gift tax exemption limit
  • Information about the American Opportunity Credit

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related lesson on tax strategies for education costs
  • Information recall - access the knowledge you've gained regarding what occurs when a gift exceeds the annual gift tax exemption limit
  • Knowledge application - use your knowledge to identify a true statement about 529 plans

Additional Learning

For additional information about college and taxes, refer to the corresponding lesson titled, Planning for Education Costs: Gift & Income Tax Strategies. The lesson includes these specific objectives:

  • Recall examples of 529 plans and how they are used
  • Identify all of the tax credits that can be used when a person is in college
  • Discuss the amounts of tax credits that are given and how long they can be used
  • Know information about gift taxes