American Opportunity Tax Credit and Lifetime Learning Credit. Lou and Stella Nor

Question

American Opportunity Tax Credit and Lifetime Learning Credit. Lou and Stella North are married, file a joint return, and have two dependent children in college, Phil and Jaci. Phil attends a State University in a neighboring state, and Jaci attends a State University in their home state. Neither receives any type of financial assistance. The Norths' modified AGI in 2017 is $122,000. The children's classifications and expenses are as follows Spring Semester 2017 (paid in January 2017) Senior $7,500 Fall Semester 2017 (paid in July 2017) Master's candidate $8,000 Phil: Tuition Laboratory fees Student activity fees 500 500 100 100 ourse materials (books) Room and board 400 3,200 450 3,200 Sophomore $1,600 Junior $1,750 ci: Tuition Student activity fees Course materials (books) Room and board 100 100 250 3,500 300 3,700 a. Compute any education credits that the Norths may claim in 2017. b. How would your answer in Part a change if Phil received an academic scholarship of c. How would your answer in Part a change if Lou and Stella's modified AGI was d. How would your answer in Part a change if Phil had been a junior during Spring S3,000 (excluded from gross income) for each semester? $175,000: semester and a senior during Fall semester?

Explanation / Answer

a.education credits=$11700

b.education credit will reduced to $11700-3000= $8700

c.Federal tax amount will be $35884.50

d.the the amount of education credit will be=$7400

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