Oregon Tax Consultants Practice Exam

Which of the following items is excluded from being a qualified educational expense?

1. Tuition fees

2. Books

3. Personal living expenses

4. Lab fees

The correct answer is: Personal living expenses

Qualified educational expenses typically include costs directly associated with attending an educational institution, such as tuition fees, books, and lab fees. These expenses are necessary for the education process and can be used to qualify for tax benefits, grants, or educational credits. In contrast, personal living expenses do not directly pertain to educational costs and are not necessary for the acquisition of an education. Examples of personal living expenses might include rent, food, transportation, and utilities. Because these costs support personal lifestyle rather than education, they are excluded from the definition of qualified educational expenses. This distinction is important for tax planning and when determining eligibility for various educational tax benefits or funding opportunities.