Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $24,000 from County Bank and paid interest of $1,440. Lionel used the loan proceeds to pay his law school Calculate the amounts Lionel can deduct for higher education expenses and interest on higher education loans tuition, under the following circumstances: (Leave no answer blank. Enter zero if applicable,) a. Lionel's AGI before deducting interest on higher education loans is $50,000. Deductible interest expense 2 3 4

Explanation / Answer

Case 1: Since the AGI is less than 65,000, student loan interest deduction can be taken up to an amount of 2,500. In this scenario, the entire amount of 1,440 can be claimed as deduction.

Expenses paid for higher education can be used as deduction to the extent of $4,000 where AGI is less than 65,000.

Case 2:

As per Publication 970, interest is gradually reduced is the AGI is between 65,000 and 80,000. Therefore,deductible interest expense is 576.

Case 3:

Interest expense is not deductible as his AGI is greater than 80,000.

Deductible interest expense 1,440 Deductible education expenses 4,000

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.