We withdrew money from an IRA to pay the college tuition for two of our kids. One of our kids was no longer a dependent last year so we only paid half of his tuition and fees (our share was only $3000). I have two questions....

1) Am I able to list the money I paid for his tuition as an exception to the penalty for the early withdrawl or is it limited to higher education expenses for dependents?

2) I am assuming if I am able to avoid penalty on that money, he can still claim the $2000 deduction for the $3200 he paid for his tuition.

Thanks in advance!

If you cannot claim the child as a dependent, then you are NOT eligible for the "higher education" exception.

BTW, the gross income rule DOES NOT APPLY if your child is under the age of 25. However, you and he/she must agree as to who claims his personal exemption.

Thanks for your response. He is under 25 and did claim his own personal exemption.

Then, unfortunately, you are stuck. He has the irrevocable right to claim his own exemption, regardless of how stupid that decision may be.