The taxpayer has a child under the age of 24 who is a full-time student in their second year of college. The student will be claimed as a dependent on the taxpayer's return. The student's educational expenses included $8,000 for tuition and $4,000 for room and board. The student received a $5,000 scholarship for tuition use only, as well as an additional $2,500 scholarship to pay any of the student's college expenses. The taxpayer paid the remaining $4,500. Which of the following statements is correct, based on the information above?
(4 Points)
A. The student can claim the American Opportunity credit on the student's return for tuition expenses of $3,000 when the student reports the additional $2,500 scholarship as income
B. The taxpayer can claim the American Opportunity credit on the taxpayer's return for tuition expenses of $3,000 when the student reports the additional $2,500 scholarship as income
C. The taxpayer can claim the American Opportunity credit on the taxpayer's return for tuition expenses of $3,000, and neither the taxpayer nor the student should report any of the additional $2,500 scholarship as income
D. The taxpayer can claim the American Opportunity credit on the taxpayer's return for tuition expenses of $3,000 when the taxpayer reports the additional $2,500 scholarship as income